TMI Blog2011 (1) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is a company engaged in the operation of air-transportation and other air services. It filed its return of income for the impugned assessment year declaring a loss of Rs. 14,34,10,006. In the previous year relevant to the impugned assessment year, the assessee had incurred an expenditure of Rs. 14,70,45,569 towards various expenses relating to pre-operation activities. The assessee also had earned income by way of bank interest of Rs. 52,06,685. As there was an interval between the receipt of funds and utilisation of the funds, the assessee had kept certain funds available, as short-term bank deposits and earned interest income as above. In filing the return of income, the assessee set off the income towards the expenses and declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess in service industry are different than that are in the manufacturing industry. ( iii ) The appellate authority has erred in not appreciating that section 35D is a beneficial provision intended to enable the assessee to carry forward their loss claims from a longer period and it was introduced especially to benefit large manufacturing/process industries which take long gestation periods. ( iv ) The appellate authority has erred in holding that the expenses incurred by the company are to be considered under the provisions of section 35D. ( v ) The appellate authority has erred in not applying the ratio of the decision rendered in CIT v. ESPN Software India P. Ltd. [2008] 301 ITR 368 (Delhi) wherein it was held that as soon as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as business expenditure in the impugned assessment year. 7. On going through the facts of the case we find that the assessee was incorporated as a public limited company on July 26, 2004 and obtained a certificate of commencement of business on August 24, 2004 and no objection certificate was obtained from the Government of India to commence its airlines activities from August 24, 2004 and had entered into an agreement for purchase/lease of aircrafts on December 18, 2004. In addition to that, the assessee-company had also recruited personnel to involve in its business, established various branch offices and initiated other works to operationalise its activities. 8. But we are afraid that the above activities alone do not amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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