TMI Blog2015 (12) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore in our understanding of the law, the claim of the expenditure is allowable. We, accordingly, set aside the order of the Ld. CIT(A) and direct the AO to allow the claim of expenditure - Decided in favour of assessee. - I.T.A. No.3855/Mum/2013 - - - Dated:- 28-10-2015 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER For The Appellant : Shri F.V. Irani For The Respondent : Shri Vivek Anand Ojha ORDER PER N.K. BILLAIYA, AM: This appeal by the assessee is preferred against the order of the Ld. CIT(A)-7, Mumbai dated 19.03.2013 pertaining to Assessment year 2008-09. 2. The sole grievance of the assessee is that the Ld. CIT(A) erred in confirming the disallowance of the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise salaries alongwith job description and details of tax deducted at source. The Ld. Counsel further drew our attention at page-12 of the Paper Book which contains details of revenue expenses incurred during the year, the said details read as under: Sr. No. Description Amount 1. Salaries, Wages and Bonus 74,01,305/- 2. Contribution to PF, Gratuity, ESI, Pension scheme etc. 9,11,647/- 3. Employee Welfare and other amenities 5,27,133/- 4. Travelling expenses 2,02,602/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be appropriate in this regard to refer to the proviso to Sec. 3 of the Act, which refers to and defines the term, previous year in relation to newly setup business or profession and not with reference to the date of commencement. Sec. 28 of the Act postulates that profit and gains of business or profession carried out at any time during the previous year, shall be taxed under the head profits and gains of business or profession. 10.2. The undisputed fact is that the assessee has recruited employees for the purpose of its business and as per the details exhibited at page-10 of the Paper Book about 16 employees are for the job of quality assurance. The assessee is in the business of Merchandising of diamonds/gold/jewelleries. Undisputed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven to the recruited employees. This is cler from the reply given by the appellant/assessee dated 14.11.2007. The issue which arises is, whether the business had been setup as on 1st April, 2004 or was it setup only on 1st June, 2004. There is a distinction between setting up of business and commencement of business . 10.5. While deciding the issue, the Hon ble High Court of Delhi elaborately discussed and considered the decision of the Hon ble High Court of Bombay given in the case of Western India Vegetable Products Ltd. Vs CIT 26 itr 151 (Bom). Further reliance was placed on the decision in the case of CIT Vs E-Funds International India (2007) 162 Taxman 01 (Del) wherein also the issue considered was whether the business was setu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges. This training was given by professional experts under the supervision and control of the appellantassessee. The moment the said operations were commenced, the business had been setup and the subsequent rendering of service to third parties would be at a later date when the actual services were rendered to the parent/holding company. 11. After considering the facts of the case in hand in the light of the decisions referred to hereinabove, in our considered opinion, upon recruitment of employees, the factum that expenditure under the different heads, as noticed above at para-7 was incurred is indicative that business was set up. 11.1. Therefore in our understanding of the law, the claim of the expenditure is allowable. We, accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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