TMI Blog2008 (3) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... d by [V. B. GUPTA, J.] -1. The short question before us in this appeal is as to whether the Income Tax Appellate Tribunal (for short as "Tribunal") was right in allowing the deduction of expenditure incurred by the Assessee on or after 15 th August, 1995 holding that the business has commenced on this very date. 2. Brief facts of this case are that the Assessee Company was incorporated on 1 st August, 1995 and as such this was the first year for which the Assessee had filed its return declaring a loss at Rs.3,01,78,033/- on 29 th November, 1996. 3. On 15 th August, 1995, the Assessee had acquired license from ESPN Inc to sub-license for distribution of ESPN Programming Services in India via Cable Television System, Satellite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and did not allow the same as revenue expenditure. 6. Aggrieved by this order, the Assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for short as "CIT(A)"] who held that the business of the Assessee was set up on 15 th August, 1995 and therefore Assessee was entitled to claim all the expenditure incurred on or before this date including depreciation allowance. 7. Not satisfied with the order passed by the CIT(A), the Revenue preferred an appeal before the Tribunal. The Tribunal vide its impugned order dated 8 th September, 2006 passed in ITA No.463/Del/02 relevant for the assessment year 1997-1998 dismissed the appeal holding that the assessee has commenced the business on 15 th August, 1995. 8. Aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, in the said financial year, the previous year shall be the period beginning with the date of setting up of the business or profession or, as the case may be, the date on which the source of income newly comes into existence and ending with the said financial year." 12. According to this section, it is "setting up" of the business and not the "commencement of the business" that is to be considered. A business is commenced as soon as an essential activity of that business is started. Thus, a business commenced with first purchase of stock in trade, the date when the first sale is made is not material in that respect. Similarly, a manufacturer has to undertake several activities in order to bring to produce financial goods and he co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... association of the company. This was the activity, which was first in point of time and which must necessarily precede all other activities and on this activity being done, the business of the Assessee, would be deemed to have been set up." 15. Since the Assessee has acquired the license on 15th August, 1995, and after getting the license, the Assessee was in a position to start the business, so, under these circumstances, we have no hesitation in holding that the Assessee has commenced his business on or after 15th August, 1995 and we do not find any infirmity with regard to this finding in the order passed by the Tribunal. 16. Under these circumstances, no fault can be found with the view taken by the Tribunal. Thus, the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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