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Income Tax Appellate Tribunal, “SMC-C” BENCH : BANGALORE
Before: SHRI A.K. GARODIA
This appeal is filed by the assessee which is directed against the order of the learned CIT(A), Bengaluru dated 26.05.2016 for the assessment year 2012-13. The grounds raised by the assessee are as under:
On the facts and in the circumstances of the case, the order of the CIT (Appeals) vide order dated 27.05.2015, for the Assessment year 2012-13, is against the law and liable to quash.
On the facts and in the circumstances of the case, CIT (Appeals) ought to have appreciated that, the claim of the appellant for expenditure under section 57 of the act is correct. Thus, without appreciating the facts of the case, the order of the CIT (Appeals) is liable to be deleted.
On the facts and in the circumstances of the case, the CIT(Appeals) ought to have appreciated that, the deposited amount by the appellant company is belong to appellant company, the same was declare in the returns. Therefore the appellant claimed expenditure for the appellant company business, for the business premises for the rent amount, audit fees, travelling convince charges, salary and other expenses, claimed as business expenditure is correct. Thus, the order of the CIT (Appeals) is liable to be set aside.
On the facts and in the circumstances of the case, CIT (Appeals) fail to appreciate that, the Appellant earned income from the deposit amount and claimed expenditure of Rs.6,61,741/- is correct. Therefore the CIT (Appeals) confirmed order of the Assessing Authority and dismissed the appeal of the appellant is against the principle natural justice.
On the facts and in the circumstances of the case, CIT (Appeals)Ought to have appreciated, the transaction of the appellant that, the deposit amount and earned income and nature of the expenditure are business nature. Hence the claim of the appellant is correct and CIT(Appeal) ought to have refrained from communicating the Assessment Order. In the Interest of justice and equity.
For such other grounds that may be urged at the time of hearing and it is prays that kindly may allow the appeal in the interest of justice and equity.
This appeal was last fixed for hearing on 14.03.2017. On 2. this date, Shri. Mallaharao K, Advocate and AR of the assessee moved an application for adjournment and it was submitted in the same that the appeal may be fixed for hearing after 2 weeks. The hearing was adjourned to 10.4.2017 and this date of next hearing was announced in the open court. It was duly noted by the representative of the learned AR of the assessee and he duly signed on the order sheet. On 10.4.2017, none appeared on behalf of the assessee and there is no request for adjournment and therefore, this appeal was heard ex-parte qua of the assessee. The learned DR of the revenue supported the orders of the authorities below. He also placed reliance on the judgment of the Hon’ble Apex Court rendered in the case of Vijaya Lakshmi Sugar Mills Ltd., vs. CIT as reported in 59 Taxman 22 (SC). It was submitted that under similar facts, the disallowance was upheld by the Hon’ble Apex Court.
I have considered the rival submissions of the learned DR 3. of the Revenue and have gone through the orders of the lower authorities and this judgment cited by the learned DR of the revenue. Para 5 of the order CIT(A) is relevant and therefore, for the sake of ready reference, this para is reproduced from the order of the CIT(A). The same is as under: “After considering the fact of the case and, the arguments advanced by the appellant and perusing the profit & loss account and balance sheet maintained by the appellant company, it is seen that the appellant company has been incurring losses year after year and no substantial business has been carried out. In fact, the company has discontinued its company’s operation w.e.f. 30.5.2002 as recorded in the schedule to the accounts. The financial statements as on 31.3.2012 have been prepared on liquidation basis. The expenses claimed by the appellant claimed to be nominal expenses are audit fee Rs. 70,000, travelling and conveyance charges Rs. 1,35,741, rent paid Rs. l,86,000 and salaries and other expenses of Rs.2,70,000 which have been claimed against income from other sources being interest income. Considering the facts of the case, where no business income/loss is declared, the expenses so claimed cannot be treated to have been exclusively incurred for the purpose of. earning interest income allowable u/s 57 of the Act. The disallowance made by the Assessing Officer is in order and is upheld.”
From the above para reproduced, it is seen is that the 4. expenses claimed by the assessee are claimed to be normal expenses and these are claimed to be set off against interest income and it is also noted that the business activity of the assessee have been stopped w.e.f. 30.5.2002. Now in the light of these facts, I examine the applicability of the judgment of Hon’ble Apex Court cited by learned DR of the revenue. In that case also, the income of the assessee was on account of interest on fixed deposit and the assessee claimed deduction of various expenses such as salaries, legal fees, TA & DA, postage, stationery etc. In the present case, the expenses claimed are audit fee, travelling and conveyance, rent paid and salary and other expenses. Hence it is seen that the facts in the present case are similar to the facts in the case of Vijaya Lakshmi Sugar Mills Ltd., vs. CIT (supra) and therefore, by respectfully following this judgment of the Hon’ble Apex court, I decline to interfere in the order of the CIT(A).
In the result, the appeal of the assessee is dismissed. 5.
Pronounced in the open court on this 21st day of April, 2017.