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| The Tax Publishers2020 TaxPub(DT) 1413 (Ahd-Trib) INCOME TAX ACT, 1961
Section 37(1)
Mere lull in business activities did not mean that assessee had closed down its business activities. Accordingly, assessee could not be deprived of the benefit of claiming deduction for the expenses incurred to keep setup of the business in existence.
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Business expenditure - Allowability - Expenses incurred to keep setup of business in existence during temporary lull -
Question arose for consideration was whether temporary lull in business activities amounted to closure of business so as to disallow deduction for the expenses incurred to keep setup of business in existence.<>Held: There can be a situation when assessee is not able to generate any business but it has to incur expenses to keep its business setup in existence. Furthermore, business is governed by market forces beyond the control of assessee. Thus mere lull in business activities did not mean that assessee had closed down its business activities. Accordingly, assessee could not be deprived of the benefit of claiming deduction for the expenses incurred to keep setup of business in existence.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 271(1)(c)
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