TaxTMI 
TaxTMI 
2014 (5) TMI 893
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....this expenditure of a sum of Rs.1,08,41,068/- as revenue expenditure on the ground that : "The records show that the assessee did never revive operation or manufacturing during this year or in any other subsequent years. In subsequent year the assessee earned income from rent of warehousing and sale of accumulated old stock. It has no relation to the manufacturing unit where all the 193 (one hundred and ninety three) workers were retrenched and the factory was fully closed. Case of the assessee is fully identical with the case of M/s. Binani Printers (P) Ltd. - Vs. - C.I.T. Calcutta (143 - ITR page 338/Calcutta H.C.). In the circumstances, a reasonable conclusion that can be drawn is that the compensation claimed to have been paid to the w....
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.... Calcutta High Court in the case of Binani Printers (P) Ltd. (supra) and the Madras High Court in the case of M. Seshadri Iyengar & Sons (supra) would not apply to the facts of the present case as in both these cases the respective businesses had come to complete closure, which is not the case here. Ultimately therefore, we uphold the order of the CIT (A) in directing the AO to allow the entire retrenchment benefits of the order Rs.1,08,41,068/-." Aggrieved by the order of the learned Tribunal, the present appeal was preferred. Ms. Das De did not dispute the fact that the payments were not made by the assessee after the business had been closed down. As a matter of fact, in paragraph-9 of the impugned order, the learned Tribunal has recor....
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....did not come to a closure and that the assessee made such payments in order to effect economy and rationalisation of its personnel. No asset of enduring nature came into existence by reason of the payments though benefits accrued to the assessee thereunder which would continue not only for one year but in future years. But this benefit cannot be related to any asset as such." Ms. Banerjee also drew our attention to a Division Bench judgment of the Karnataka High Court in the case of C.I.T. Vs. Margarine and Refined Oils Co. Ltd. reported in 282 ITR 576 wherein the Division Bench after considering various judgments including the judgments of the Supreme Court held as follows : "An assessee can carry on business personally by using the comm....