TMI Blog2013 (7) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... made is immaterial. Similarly, for manufacturing, several activities in order to bring or produce finished products have to be undertaken, but business commences when the first of such activities is taken. Assessing Officer and the first appellate authority did not specifically go into the factual matrix relating to and to ascertain the date of “setting up” of business, though order of the first appellate authority is more detailed and elaborate - Decided against Revenue with cost of ₹ 10,000/- - ITA 131/2010 - - - Dated:- 9-7-2013 - Sanjiv Khanna And Sanjeev Sachdeva,JJ. For the Appellant : Ms. Suruchi Aggarwal, sr. standing counsel For the Respondent : Mr. Satyen Sethi and Mr. Arta Tarana Panda, Advocates JUDGM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 3rd August, 1995 and certificate of commencement of business is dated 29th August, 1995. Thereafter, respondent-assessee entered into technology licence agreement dated 12th September, 1995 and started its commercial operations on 1st October, 1995. 3. On or after 3rd August, 1995 till 30th September, 1995, the respondent-assessee had incurred the following expenses:- I Recruitment Training expenses 75,777 ii Rent 9,37,007 iii Printing Stationery 739 iv Postage, Telephone, Telex 2,44,082 v Insurance 24,366 vi Office Maintenance 5,45,000 vii Travelling conveyance 12,90,138 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter examining the case law. He observed that the date of incorporation cannot ipso facto be treated as the date of setting up of operations as incorporation results in registration of the company but does not necessarily enable it to commence business. Legal requirements like registration under the sales tax etc was required and the assessee had to prove before the Assessing Officer that commercial operations could have been commenced before 1st October, 1995. No such fact was recorded by the Assessing Officer. 5. We have already referred to para 6 of the order passed by the tribunal which records the findings of facts ascertained by the tribunal. We have also noted the heads under which expenses have been claimed. The tribunal in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e difference between commencement and setting up of a business and, inter alia, observed as under:- The important question that has got to be considered is from which date are the expenses of this business to be considered permissible deductions and for that purpose the section that we have got to look to is section 2(11) and that section defines the previous year‟ and for the purpose of a business the previous year begins from the date of setting up of the business. Therefore it is only after the business is set up that the previous year of that business commences and in that previous year the expenses incurred in the business can be claimed as permissible deductions. Any expenses incurred prior to setting up of a business wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock-in-trade and the date on which the first sale is made is immaterial. Similarly, for manufacturing, several activities in order to bring or produce finished products have to be undertaken, but business commences when the first of such activities is taken. 8. In view of the facts found by the tribunal, we do not think that any substantial question of law arises for consideration. Pragmatic and practical view has to be taken. We also record that the Assessing Officer and the first appellate authority did not specifically go into the factual matrix relating to and to ascertain the date of setting up of business, though order of the first appellate authority is more detailed and elaborate. Thus, there is nothing to controvert the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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