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2022 (6) TMI 942 - AT - Income TaxAllowable business expenditure - Proof of Set - up of business - manufacturing activity of the assessee was part of composite business activities and the same had not commenced because the construction of building and installation of plant & machinery was in progress - HELD THAT:- As it could be said that business could be said to have been set-up from the date when one of the categories of business activity is started and it is not necessary that all the categories of its business activities must start either simultaneously or that the last stage must start before it can be said that the business was set-up. What is required to be seen is whether one of the essential activities for the carrying on of the business of the assessee company as a whole was or was not commenced. When a business is established and is ready to commence, then it can be said that business has been set-up. The business would be set-up when the necessary infrastructure was acquired by the assessee and the assessee started paying salaries and allowance of the experts. The assessee, in the present case, had achieved the process of establishing the business. We concur with the submissions of Ld. AR that the assessee’s business was already set-up during AY 2012-13. Therefore, the business expenditure as claimed by the assessee would be allowable deductions in both the years. We order so. Accordingly, the appeals, for both the years, stands allowed. AO is directed to recompute the income in terms of our above order.
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