Karnataka High Court
The Commissioner Of Income Tax vs M/S Blend Well Bottles Pvt Ltd on 17 February, 2010
Bench: K.L.Manjunath, B.V.Nagarathna
:5 %:j\'#3%%&">
2% ffifi Eififi aasa? $3 KAE§g§&K§ %f E§§éfi$§§§*; ,
figfflfi $313 TEE :?"'m&§ $§W§aEE§A3§;2§:§j_
§gEgEE@Vx
$§g §$§ 23% ER $§$?:$g Kfav§;§33¥$§§,w.
§§§«. * =.: 'I
yag §§§?§L§ %§§ 3$s?:§E E ?,§gga3g§3§&
E.§.éQ§§§§§£§2§§§",
EETEEEE: - vaw-T=V
2 $32 $$¥&:SS:$fia§ é? :£§a§$ %gX
a,g,3a:;§:§§.» =' *. . 3 -
§@E£§g §$g@_
ggggggggg
2 TE? §$§Z§§$fi§ £§%E:§$Z@§§R gy Zfiflfififiwfiéxg
$@%§§E¥ c:§é;$«é€i};
fi$§;§§EL3Z§$;*§§EE§S Rfiéfi
4g§§§&§§§§_
;».:R u '~ ---------- ~' é§?EL;&€fi
V {gg*§:;§%§x?=gg§§%£§ALA§%§?.;
€
«_ u_2. %;$ §zE§§ §ELL E§T?L§S §¥§ a?§
'a_x,_gR£§ER§ gaaggg ??§ gang
'{Ey : fiffi 3 3 §§££
,_ % ,;x§5§% Rfikfi
I "gggggaagg
I EE$?§§E£§%
ifi§,§§%T§§§§$§§§§?}
E'§1i3! §,':;§'f.E: zfiieé izfgé zégg Qf tfia Ezéfifiiifi
i€'a,X fiat, :§§'.i azrigizzg 922%: mf azéer airaztaé;
fifl...
13.5.2004 passed in ITA No. 124/Bang/2003 for
the Assessment Year 1994-95, praying that this
Hon'ble Court may be pleased to: W i
i.formulate the substantial questions 65 fléwg _
stated therein u
ii. allow the appeal and set aside"t;eporéerJ"
passed by the Income Tax Appe1late.Trihunal,
Bangalore Bench in ITA. No;124/Bang/2OU3':dtfQi
13.5.2004 confirming the order passed by they
Commissioner of Income FTax(Appeals)<I,
Bangalore and confirm the order passed by the
Asst.Commnr.,of Income Tax, ucompany Circle-
4(l),Ban9alore etc. k h it' uh hii
THIS APPEAL comruc ox Fog asaains THIS
DAY, MANJUNATH J, flELIVERED_THE FOLLOWING:
5h; ~JsnsMsN:*i
The irefienuei has "come Hnp in 'this appeal
challenging they concurrent findings of the
order passed by the Commissioner of Income Tax
Vhiappealsqyg which "has been confirmed by the
1IncomeifpTaxy@ Appellate Tribunal in ITA
No{i;4/saga/2003 dt.13.5.2004.
2@N:The facts of this case are as
&'"hherennder: .
'WI
The respondent~assessee is engaged in the
manufacture and sale of Indian made foreign liquor. For the assessment year 1994-95 the assessee filed a return of income declaring a loss of Rs.4,65,540/--. The matter was takenfljfl up for scrutiny assessment. Juuring the coarse» of scrutiny, "the Assessingk Officer *g¢:iée&?T that for the year ending 'Si 3,i§§§{ Wthe assessee had not carried #6 the manufgcggring activities and that the.hu§;uess'eas closed on account of the"iocaI"prohiem§dLIffié assessee had claimed_ the ddepreciation on the assets amounting" to fRsa2}b3.536/" on plant and __machinery. RThe_ Assessing Officer had not Vfigranted, the "depreciation. on the ground that the assessee had not carried on the business actifiityugdxhccordingly, the order passed by "Assessing Officer on 31.1.1997. On an ,Mm "Qppeai, the Commissioner of Income Tax .hV*,A'VKhfipeals), came to be conclusion that the '§'>/"
~...a V assessee was forcibly closed his business activities on account of local problems. Consequently, he allowed the appeal by this order dt.16.lG.2002. Being aggrieved by thé. same, the revenue filed an Appeal before the fi Income Tax Appellate Tribunal;=.which "appeal fl came to be rejected by the Tribunal confirming "
the order passed by the Cofimissioner_ef income Tax (Appeals). Challenging the legality and correctness of the same} tHe'p;eg¢fit appeal is filed raising the following duestions of law:
1) Whether,i the "Appellate Authorities were correct in*holding that the Assessee would be entitled to claim depreciation as well as hexpenditure under Section 32 and .:pSectionE37 of the Act respectively, even "_'whenT'ad&ittedly no business activity is Aaarriedl on by the Assessee during the current assessment year.
V 'Whether the Appellate Authorities were ibcorrect in holding that if there is a lull fin the business activity or the same is §§/ likely to be continued in future, the business can be deemed to have been continued and all expenditurg;W depreciation can be allowed and the i5ss¥h~ accumulated loss should be permitted to he_ v Carried forward.
3. We have heard -the counsel '£9: ~Ehe parties.
4. The main contention=of the appellants counsel before _us .is;_since'1the business activities of the assessee had been closed for the relevantyassessment year, the assessee was not entitled to claim depreciation as well as expenditure 'under}ssettions--32 and 37 of 'the a%Incofie,1ax Act, -To ----- support his arguments, he v5hasT:eliedgu§on the Judgment of the Supreme co'u;_;£ in 7i.:.§66 ITR Page 1 (COMMISSIONER or <1Ncom_TAx VS.LAI-IORE ELECTRIC SUPPLY COMPANY R<."iTD?f Relying upon this Judgment, he requests .'mu:the Court to set aside the order passed by the £32"
(1 Commissioner of Income Tax (Appeals), as well as the Tribunal.
%w _.
5. Per contra, Ma. E$RQB$&$$fi, tthe learned counsel appearing for the respondentkp, assessee contends that the facts in@¢1véa';5* the present case are different :;¢m*¢h§=c§§§_T involved in LAHORE sI.;s_.cTRIr:_,7-- sup:-fix" 'L'fpI'i According to him, the aforesaid Judgment has no application to the facts and circumstances of the present case, 'in order to substantiate the same, he contends that the assessee had no intentiQnrto cl@§é its business. Business was closed on account of the local problems not on . V §':V-;-y/ y . account of shefdispute between the employer dgand*employees, Considering the problems in the locality not only the business of the assessee [but also the business of others were closed land later on the same has been revived and it 'eis functioning. He further contends that if dgthe business had been closed not on account of 1"?' 4 the negligence or attributable to the assessee, the revenue cannot contend that the if " r"'*;,,.,. , assessee had closed its business, htere£¢%épg"_ it cannot claim: depreciation, ;"= in vitheg circumstances, he requests ;the Rcourtbftogw dismiss the appeal.
6. Having heard theh counsel_ for the parties, we are view that the Questions of law raised in this" appeal; aged fiéinbé answered against the rewenue for the following reasons:
It .i; .§agg%;pn diapers ,that the assessee was carrying on the business in manufacturing the Indian Vfiadelfiforeign liquor and the »_activities of the assessee is continued even Y¥t§¢a¥I 'The business premises of the assessee isu.situa£ed} in Punjab. On account of the ' riots and other activities in the place, where nthe*§actory of the assessee is situated, the ' assessee was forced to close down the activity 'i,till the peace was restored in the locality. ?&ig fgat is fiat éisgutaé fig tfie ravanrég if far the reasans whis& were bgyaaé %heg$§n%z§E gf tha aafiasgaag :t$ basifié$a«agt;viiia$¥wa$ aiasaég such glasaza $&fifi$t b ttaatwfi as 3_ a;G3uxe with an intfifitiaa ¥i&,_$:fi$é the' busifiaas 333% $5: ailyéfifl 3fi¢§ claéure E33 ta be txaaigfi &:"3 3:1 a§<:: t --§£ §f$%."§:_"V.f:L*Jl';f vismageaura The A$sa§$i%g*Qffiga: hag faiififi ta taka mate afi tfia saafi ax fiE%§&3$@S$@@.di$ mag figfififi mtg bugimasa §¢%i$:ti&$%@& gtg Qwa. But it wag am a@$$un§ mi Vufifmzégaan aizammgéanae, fiuafi §;§$§:& %&E£@Va$% fiisaniiiie 'Ehé ggsaggaa ts A'fi§aém:i%éz§§§r%a:azi§x¢ fhe faais 1% Qivfié in $*:.:§§§:;*§ igggyzawgczg' zézzgzzzéw 3.32% §§§:§@;§"fif§e§e:¥ ?h§r@ tfia ifigimass wag '=€i§$$§ witfi am ifii$§ti§§ ta alaga the bxsifiegg K$fi$§ Egg al: ané it fiafi ma intafitigm tg raviva "its %§s:m§s$ anfi aha Scaggng ifigaif was gala gnaw tfig fi§§§&§y' wag fiat a viabla Qafipamy. ?h@z§§$:a§ we aye fig thfi viaw 3&3: aha 'JV/_ :&$isism raiieé.'§pan Zby' tha EQVEEEEE hag _n$ §§iiaatimm ta t&a facts mf this aase W §g gfie airaumstafiaesg we axes af' t§& 'v:aw' %hgt@ §h%u §ribuna1 as wag; ag tfie Camgiéézgfigr fig gfifiémé"
Tax, ware §a$t;f:e§ in §:afi%i$§ §e§g%f,t§ §hé"
3$§§$S%@ , %$c@:fii§gi§; W§ '®$$:flV V§hfi subazanagai qmestifigs ¢§'3§:%gz:gas* in; t§i3 agpaal agaifigt aha zfiwfifiéé gfifikifi fiavmur af aha a$sa$$@g;. g _ i§a.&§pea: is fiigfiiggafi, fog!/;
§mé"*' 3s,,L. I ?'*?2?W?* §a£i£§§§a .53 sun %&/ %%§ ff?
Eggww