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TMI Blog2016 (2) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT(A) has erred in concluding that the assessee's business was set up during the year. In para 5.4 of his order the Ld. CIT(A) has concluded that the business of the assessee was set up since incorporation, however there is no evidences to suggest that the assessee has moved any further from the initial stage of planning." 3. The assessee company was incorporated on 19th September 2007 under the automatic route, as per the Foreign Direct Investment Policy, 2006. The Company was incorporated to carry to establish, develop, lease, license, master franchise rights from international/domestic brands and to further subfranchise those rights. The assessee is a group subsidiary of Carrefour Group, second largest retailer of the world. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase of fixed assets such as computer and software (of Rs. 16,50,180/-), office equipments (of Rs. 27,53,594/-), furniture's and fixtures and lease hold improvements (of Rs. 91,46,639/-) etc. The assessee further obtained professional advices regarding the Indian business environment, market survey catchment area, products availability, supply conditions and other legal/statutory requirements, licences and approvals etc. and on this account incurred expenses to the tunes of Rs. 2.8 crores which indicates that the assessee had set up its business operations. During the relevant previous years, the assessee identify various franchisees and discussed with them regarding terms of franchisee, technical services and other commercial agreements. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its incorporation. Further, it would be worth mentioning here that Hon'ble Delhi High Court in the case of CIT vs. ESPN Software India (P) Ltd. (184 Taxman 452) 2009 considered that date of acquiring a distributor license of ESPN Programme is a date of business set up and all expenses should be allowed from that date. Recently, similar view has been given by Mumbai ITAT in the case of De Beers India Prospecting Pvt. Ltd. (ITA no. 4(D/Mum/2006) dated 16 Dec 2011 wherein it was held that the approval received from FBPB and Government for carrying out operation relating to prospecting of diamonds and starting of prospecting activity before actual mining leads to set-up and commencement of business activity. The ITAT while forming the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action of the Ld. AO is reversed." 6. The AR submitted that the present case is covered by assessee's group company case, Carrefour WC & C India Pvt. Ltd. Vs. DCIT ITA No. 42/2014 decided on 22.09.2014 wherein the Hon'ble Delhi High Court has granted the relief in favour of the assessee therein. The same is annexed at page 96 to 118 of the paper book filed by the assessee. The AR further submitted that there 6 ITA No. 2800/Del/2012 was no trading activity and merely franchisee activity was going on. The object of the assessee company was cited from page 7 and page 97 of the paper book. 7. The DR submitted that the Auditor's report in Assessment Order at para 2, 3.2, 3.3 and 3.4 as well as Form 3CD gives different scenario to the object o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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