WESTERN EXPRESS INDUSTRIES LTD, MUMBAI V. ITO RG 8(3)(4), MUMBAI

ITA 7124/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2697 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 28-11-2014
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURANA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & PAWAN SINGH (JM) I.T.A. NO. 7124 /MUM/ 20 1 4 (ASSESSMENT YEAR 2011 - 12 ) M/S. WESTERN EXPRESS INDUSTRIES LTD. TOBACCO HOUSE S.V. ROAD VILE PARLE WEST MUMBAI - 400 056. VS. ITO - RANGE 8(3)(4) AAYAKAR BHAVAN M.K.ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAACG4094K ASSESSEE BY SHRI GAURAV BANSAL DEPARTMENT BY SHRI VIVEK PERAMPURANA DATE OF HEARING 2 6 . 7 . 201 6 DATE OF PRONOUNCEMENT 26 .7 . 201 6 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 19.9.2014 PASSED BY LEARNED CIT(A) - 18, MUMBAI AND IT RELATES TO A.Y. 2011 - 12. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LEARNED CIT(A) IN CONFIRM ING THE DISALLOWANCE OF ` 4,10,959/ - MADE BY THE ASSESSING OFFICER. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE HAD CLAIMED LOSS OF ` 4,10,539/ - IN THE RETURN OF INCOME FILED BY IT. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE H AS NOT CARRIED ANY BUSINESS DURING THE YEAR UNDER CONSIDERATION AND HENCE HE TOOK THE VIEW THAT EXPENDITURE CLAIMED BY THE ASSESSEE IS NOT ALLOWABLE. ACCORDINGLY, THE ASSESSING OFFICER DISALLOWED AGGREGATE AMOUNT OF EXPENDITURE OF ` 4,10,959/ - CLAIMED BY T HE ASSESSEE. L EARNED CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. M/S. WESTERN E XPRESS INDUSTRIES LTD. 2 4. LEARNED AR PLACED RELIANCE ON THE ORDER DATED 1.7.2015 PASSED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE RELATING TO A.Y. 2009 - 10 AND 2010 - 11 AND SUBMITTED THAT THE COORDINATE BENCH HAS ALLOWED THE EXPENDITURE CLAIMED BY THE ASSESSEE IN THE ABOVE SAID YEARS. 5. ON THE CONTRARY, LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEES CLAIM RELATING TO A.Y. 2001 - 02 WAS ORIGINALLY ALLOW ED BY THE TRIBUNAL. THE COORDINATE BENCH OF THE TRIBUNAL HAS FOLLOWED THE SAID DECISION FOR DECIDING AN IDENTICAL ISSUE IN A.Y. 2009 - 10 & 2010 - 11. 6. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS NOT BEEN CARRIED ON ANY BUSINESS SINC E 2001 - 02 ONWARDS AND HENCE THE CASE OF THE ASSESSEE CANNOT BE TREATED AS THE CASE OF TEMPORARY LULL IN THE BUSINESS. ACCORDINGLY, PRAYED THAT THE ORDER PASSED BY LEARNED CIT(A) SHOULD BE CONFIRMED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FIND MERIT IN THE SUBMISSIONS MADE BY LEARNED DEPARTMENTAL REPRESENTATIVE. THE ASSESSEE HA D STOPPED THE BUSINESS IN THE YEAR NEAR TO AY 2001 - 02 . HENCE THE ISSUE OF ALLOWING EXPENDITURE , IN THE ABSENCE OF ANY BUSINESS ACTIVITY CAME TO THE CONSID ERATION OF THE TRIBUNAL IN A.Y. 2001 - 02 AND THE CLAIM WAS ALLOWED . IN AY 2009 - 10 & 2010 - 11, THE CO - ORDINATE BENCH OF TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION RENDERED IN AY 2001 - 02. HOWEVER, WE ARE OF THE VIEW THAT THE FACT S THAT EXISTED IN AY 2001 - 02 CANNOT BE SAID TO EXIST DURING THE YEAR UNDER CONSIDERATION. THE SETTLED PROPOSITION IS THAT THE EXPENDITURE OF A BUSINESS IS ALLOWABLE AS DEDUCTION, EVEN IF NO BUSINESS ACTIVITY IS CARRIED ON PROVIDED THAT THE SAME WAS DUE TO TEMPORARY LULL IN THE BUSINESS. HOWEVER, IN THE INSTANT CASE, THE V ERY FACT THAT THE ASSESSEE DID NOT CARRY ON BUSINESS SINCE 2001 - 02 ONWARDS, I.E., ALMOST FOR 11 YEARS WOULD SHOW THAT THE ASSESSEE HAS STOPPED ITS BUSINESS COMPLETELY . UNDER THESE SET OF FACT, WE ARE OF THE VIEW THAT THE ASSESSEES CASE CANNOT BE CONSIDERED TO BE THE CASE OF TEMPORARY LULL IN THE BUSINESS. IN VIEW OF THESE M/S. WESTERN E XPRESS INDUSTRIES LTD. 3 FACTS, WE ARE OF THE VIEW THAT THE DECISION RENDERED BY THE CO - ORDINATE BENCHES IN THE EARLIER YEARS CANNOT BE TAKE S UPPORT OF BY THE ASSESSEE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE DECISION TAKEN BY LEARNED CIT(A) ON THIS ISSUE. ACCORDINGLY, WE CONFIRM HIS ORDER PASSED BY HIM ON THIS ISSUE . 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 26 .7.2016 SD/ - SD/ - (PAWAN SINGH) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 26 / 7 / 20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS