TaxTMI 
TaxTMI 
2017 (3) TMI 805
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....ment year 2010-11. Since the main issue involved in these two appeals is common, the same have been heard together and are being disposed of by a single consolidated order, for the sake of convenience. 2. First we take up the appeal of the assessee for the A.Y. 2006-07, which is directed against the order of the Ld. CIT(A)-18, Kolkata, dt. 18/11/2015. 3. The relevant facts of the case giving rise to this appeal are that the assessee is a company, which filed its return of income for A.Y. 2006-07 on 07/11/2006, declaring total loss of Rs. 1,04,61,604/-. In the said return, the income arising from various sources including interest, profit on sale of shares etc. was offered by the assessee under the head "income from other sources" a....
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....jected the same for the following reasons given in paragraph 5 of his order. "5. I have carefully gone through the submissions of the assessee. During the course of the appellate proceedings, I have also perused the balance sheet for three subsequent assessment years. It is seen that assessee has no business activity in the three subsequent assessment years as well. During the appellate proceedings the A.R. of the assessee also confirmed that in none of the subsequent years till date, assessee has carried out any business activity. Under the circumstances it is clear that assessee had stopped business activity prior to the commencement of the current assessment year. Hence A.O. is justified in disallowing the business expenses claimed....
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....e, the learned CIT(A) erred in upholding the finding of the CIT(A} that since in this year there were no regular business transactions, the Assessing Officer had been right in denying the claim of the appellant assessee towards allowances of various expenses which had to be necessarily incurred by the appellant company for its maintenance, except to the meagre extent of Rs. 50,000/-. 3. On the facts and in the circumstances of the case, the learned CIT(A) erred in rejecting the argument on behalf of the appellant assessee that since the A.O. had assessed FBT expenses at Rs. 25,08,477/-, his actions in still disallowing the entire expenses were arbitrary, unreasoned and improper. 4. On the facts and in the- circumstances of the case, t....
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....is regard, I set aside this issue to the file of the AO for the limited purpose of giving the assessee an opportunity to support and substantiate its case for deduction of the impugned expenses u/s 57 (iii). Ground No. 2 of the assessee's appeal for A.Y. 2006-07 is treated as partly allowed. 7. As regards the issue raised in Ground No. 3, I find merit in the stand of the Revenue that the expenses of Rs. 25,08,477/-, cannot be allowed as deduction merely on the basis that FBT has been paid by the assessee on the said expenses especially when there is no income earned by the assessee under the head "income from business". The entire income having been offered by the assessee company itself, under the head "income from other sources", only ....