TMI Blog2013 (2) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... g financial year 2004-05 relevant to A.Y. 2005-06 in the assessment made u/s. 143(3) of the Act by the JCIT who allowed the benefit of carry forward of business loss and depreciation allowance to the next assessment year i.e. year under consideration. Therefore, on these facts, it can be safely concluded that the business of the assessee has been started in F.Y. 2004-05 relevant to A.Y. 2005-06. - Taxable as business income - Decided in favor of assessee. - ITA No.224/Mum/2010 (A.Y. 2006-07) - - - Dated:- 23-11-2012 - Dinesh Kumar Agarwal And N.K. Billaiya, JJ. Appellant Rep by: Shri V Krishnamoorthy Respondent Rep by: Shri Niraj Sheth ORDER Per: N.K. Billaiya: This appeal by the Revenue is directed against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icability of Section 32(2) of the Act without appreciating that there was no business activity and hence, no depreciation or unabsorbed depreciation could have been allowed. 3. The appellant prays that the order of CIT(A) on the above ground be set aside and that of the A.O. be restored. 3. Briefly stated the facts of the case are that the assessee is engaged in the business of development of Biotech Park, construction, leasing and sale of commercial properties. During the year under consideration, the assessee has shown income on sub-lease of land at Rs. 4,05,29,208/-, rental income at Rs. 16,46,710/-, maintenance income at Rs. 2,68,702/-, other income at Rs. 16,90,625/- and the net loss has been computed at Rs. 63,77,261/-. Durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see company cannot achieve its main objective which is construction and development of bio-technology park. Accordingly, the AO dismissed the claim of the assessee that subleasing of land is business activity of the assessee company. 3.2 The AO further went on to allocate the expenses to be allowed as deduction from the sublease income. The AO then allocated expenses as demonstrated on page 3 4 of the assessment order which included cost of land subleased Rs. 3,48,97,700/-, personnel expenses Rs. 1,72,954/-, Operating expenses Rs. 5,77,640/- and miscellaneous expenses Rs. 2,28,590/- and completed the assessment at Rs. 74,69,200/- after allowing set off of brought forward unabsorbed depreciation at Rs. 2,95,145/- only. 4. Being aggriev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jective of development of biotechnology park, technology park, business parks and industrial development centres to facilitate the biotechnology and life science industry. The Ld. CIT(A) further observed that for the purpose of assuming its objective, the assessee was to develop the land , create infrastructural facilities thereon which were to be made available to other parties for carrying out manufacturing/production activities in the field of technology/biotechnology. The Ld. CIT(A) further gave specific finding that as the assessee company was not having any land of its own, the land for this purpose was made available to the assessee company by the MIDC on lease basis and since the assessee company itself was in possession of land on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Registrar of Companies, Maharashtra, Mumbai which is dt. 9.7.2003. The Registrar of Companies, Maharashtra, Mumbai further issued certificate for commencement of business dt. 17th July, 2003. Thus, it is established that the assessee company commenced its business activities from 17th July, 2003. The assessee company took land on lease, developed the land and further subleased from which it derived sublease income which is in line with the joint venuture agreement and the lease agreement with MIDC. It would be pertinent to exhibit clause (e) of para-2 of the said lease deed cum JVA exhibited at page-32 of the Paper Book. Subject to the provisions of Clause 6(e) hereinbelow to use the demised premises only for assigning/sub-leasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced as in that case the Hon ble High Court confirmed the findings of the authorities below that the assessee had not commenced the business during the year in question therefore interest received on the Short Term deposit capital is rightly charged as income from other sources. The observation of the Hon ble High Court that mere inclusion of business in the main objective clause in Memorandum of Association is not enough to conclude that business has commenced, business pursuant to object clause should have been actually started, is also against the facts of the present case wherein it has been accepted by the Revenue that business was set up during financial year 2004-05 relevant to A.Y. 2005-06 in the assessment made u/s. 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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