TMI Blog2016 (4) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer regarding allowability of deduction, we find that the learned CIT(A) has not really adjudicated on this, and this issue has been treated as infructuous. Grievance of the Assessing Officer is thus clearly ill conceived. - Decided in favour of assessee - ITA No. 109/Ahd/2012 - - - Dated:- 7-3-2016 - Pramod Kumar, AM And Kul Bharat, JM For the Petitioner : Shiva Sevak For the Respondent : Sanjay R Shah ORDER Per Pramod Kumar, AM 1. By way of this appeal, the Assessing Officer has challenged correctness of the order dated 24th October, 2011, passed by the ld. CIT(A), in the matter of assessment under section 143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year 2008-09. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss at the time of accounting of actual services rendered. The Assessing Officer further observed that while the assessee may be correct, so far as accounting practice is concerned, but no deduction can be allowed, for the purpose of computing his profit under the Income Tax Act for contingent liability. The Assessing Officer further noted that the assessee has incurred a loss of ₹ 1,33,97,654/- which pertained to salary and other expenses relating to business evidencing that business of the assessee has commenced although no income has been booked . The Assessing Office was of the view that this loss has not been capitalised which shows that the assessee has initiated business operations. He further noted that the assessee has rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Letter of Approval, it needs to commence the service activity within stipulated period unless it is extended by appropriate authority. The appellant had sought extension to start commercial activities initially up to December 31, 2008 and later on up to April 30, 2009 which was duly granted by the Development Commissioner. Had the appellant already commenced the service activity, there would have not been any necessity to seek such extension, 4.7. The company inaugurated its facility in November 2008 and commenced commercial activities in January 2009. The inauguration was covered by news agencies and clippings submitted by the appellant do reflect that the facility was not operation at the time of inauguration in November 2008. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any services. 4.11. The contention of the appellant that its business has not commenced during the year gets support from its audited annual accounts, letter of extension by Development Commissioner of Kandla Special Economic Zone, the newspaper clippings, Annual Performance Report, etc. and these evidences cannot be ruled out without any cogent material on the other side. 4.12. The AO has considered that the receipt of advance itself signifies that the business of the appellant has commenced, whereas he failed to brought any evidence which signifies that services has been rendered or even the appellant was ready to provide service. Receipt of advance is merely a trade practice which cannot be considered as a decisive event regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been adjudicated separately. 7. The Assessing Officer is aggrieved and is in appeal before us. 8. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 9. So far as the issue regarding commencement of business, during the relevant previous year, is concerned, we find that learned CIT(A) has given well reasoned findings and there is no good reason to disturb the same. There is enough material on record to indicate that the business has actually commenced in 2008-09. Learned CIT(A) has categorically given findings on that aspect and learned Departmental Representative has not been able to controvert the same. The mere fact that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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