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TMI Blog2012 (4) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... and submits that this question may be left open with liberty to the Revenue to file an application under Section 254(2) of the Act before the tribunal in case the proposed amendment is enacted and the Finance Bill is passed. We accept the said statement and clarify that we have not expressed any opinion and gone into the said question and the doctrine of merger will, therefore, not apply on the said issue/question. 3. There are four other issues raised in the present appeal. The first issue relates to the date on which the business of the respondent assessee was set up. The Assessing Officer has held that the business of the respondent assessee was set up on 1st June, 2001. The Assessing Officer, therefore, disallowed expenses to the exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete state of readiness to undertake its activity, it can be said that it has set up its business, the actual commencement of business may be at a later date. The trading business of the assessee was ready to commence upon set up of requisite infrastructure i.e. acquisition of place of business, commencement of hiring of suitable personnel, identifying clients, opening bank account etc. which enabled the assessee to carry out its object clause. ITAT Delhi Bench in the case of Whirlpool of India Ltd.- 19 SOT 293 observed that there may be integregrum(sic) between setting up of business and date of commercial commencement of business, but under the Income Tax Act, all the expenses incurred after the date of setting up of business are to be all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in mind the difference between setting up of business and commencement of business and by applying the said principle to the factual aspects in the present case has reached the said finding. The factual finding recorded by the tribunal is reasonable and fair. It is not perverse. 6. The second issue raised in the appeal pertains to capitalization of expenses to the extent of Rs.47,38,979/- and consultancy of Rs.15,89,625/- paid to the architects. The Assessing Officer in this connection referred to Explanation 1 to Section 32(1) of the Act and held that the said expenditure was capital expenditure and on the said expenditure depreciation as per law could be claimed. The CIT(Appeals) has affirmed the said finding. The tribunal in the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at assessee has paid professional charges to KPMG in relation to legal formalities to be undertaken with regard to execution of agreement with DHL. The legal expenditure so incurred are essentially revenue in nature in view of the decision of Hon'ble Bombay High Court in the case of Bombay Dyeing & Manufacturing Co. - 219 ITR 521. Accordingly, we do not find any merit for the disallowance of professional charges paid to a legal consulting firm, on plea of same being capital in nature." 8. Having heard learned counsel for the parties, we frame the following substantial question of law with regard to the second and third aspect: "Whether the order of the Income Tax Appellate Tribunal reversing the findings given by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32(1) is applicable as at the first instance factual aspects have to be ascertained. 10. With regard to payment of professional charges, the tribunal has merely recorded that a professional firm had been engaged for the legal formalities regarding execution of the agreement with Dantal Hydraulics Limited. Thereafter, reference is made to a decision of the Bombay High Court. There is no discussion whatsoever by the tribunal on the factual aspects, which have been considered by the Assessing Officer and then by the CIT(Appeals). The CIT(Appeals) has in fact stated that this expenditure was in connection with the transfer of assets and liabilities from Dantal Hydraulics Limited and, therefore, should be treated as a part of cost of acquisiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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