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2013 (9) TMI 5 - AT - Income TaxSetting up a business / commencement of business - claim of business loss - at what stage a business can be said to be set up - assessee is a group subsidiary of Carrefour Group, the second largest retailer of the world - Held that:- The business of a trader can be said to be "set up" when the assessee makes a purchase subsequent to owning/leasing of either a shop or warehouse and in the facts of the present case evidently the assessee has not made any purchase or rented any shop premises from where sale could took place or for that matter rented any warehouse where the purchased goods intended to be sold can be stored. Accordingly on considerations of the facts and circumstances of the present case, it cannot be said that the business of the assessee has been set up as is the requirement of proviso to section 3 of the Income Tax Act. Reliance is placed upon the judgments s.a. State of Punjab vs. Bajaj Electricals Ltd. [1967 (12) TMI 28 – Supreme Court], wherein it has been held that business is not commenced thus when no stock is either available and even has not been purchased by the assessee, by no stretch of imagination it can be inferred that the business has been set up and ready to commence its business. Again in CWT vs Ramaraju Surgical Cotton Mills Ltd. [1966 (10) TMI 41 - SUPREME Court] also supports the view taken as it holds that a unit cannot be said to have been set up unless it is ready to discharge the functions for which it has been set up and it is only when the unit has been put into such a shape that it can start functioning as a business. - Decided against the assessee.
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