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TMI Blog2018 (3) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... the returned loss of Rs. 36,63,262/by holding that the assessee's business has not been set up? (b) Whether the order of the Tribunal is perverse as the same is passed ignoring the relevant evidence available on record?" 3. The Appellant-Assessee was incorporated on 11th February, 2005. Its object was to carry out business as operators of carriers, transport vehicle, agricultural vehicles, commercial vehicles and to provide services and facilities of letting on hire vehicles etc. 4. In its return of income for the Assessment Year 200506, the Appellant claimed business loss of Rs. 31.16 lakhs and depreciation at Rs. 5.46 lakhs. Thus, seeking a carry forward loss of Rs. 36.62 lakhs. The expenses claimed were: (i) on school fees of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y unsubstantiated. The only material on record is toward the appointment of MD, even though there is some doubt in its respect inasmuch as the resolution by the Board of Directors of the company confirming his appointment is dated 17.02.2007 (PB pg.12). Even so, when did the Chief Operation Manager join? When was the other staff, along with their names and reference to the different positions/ functions they are to discharge? When was the office premises purchased or taken on rent or hire? What is the furniture and fixture without which the premises cannot be put to use, acquired and when? We say so as the company's financial statements (PB pgs. 1624) do not reflect the same. Has the company procured the necessary hardware in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the business could be commenced? So on and so forth. No answers emanate from either the material on record or the assesssee's explanations, with the expenses as incurred itself revealing the state of preparedness of the company toward commencing its business. In our clear view, the company is clearly in the setting up stage. Besides, clearly, it is only the expenditure, post setup, that could be claimed as a business expenditure, while admittedly the company has claimed the entire expenditure incurred by it since inception, including as it appears expenditure on its' incorporation itself, which are only, like wise, capital cots. Alternatively speaking, the implication of no incorporation expenses or the company being establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p. This after the Tribunal noticing the difference between setting up of business and commencement of business. 9. The reliance upon the decision of the Apex Court in Sarabhai Management Corporation (supra) is not appropriate as the Assessee therein had purchased property and found a customer to whom the property was let. It carried out repairs, rewiring, installation of lift and other steps in the process of getting the premises converted from a residential house into a business and storage accommodation conforming to the requirements of the customer. In the aforesaid facts, the Court held though acquisition of a property for being let out could be only a preparatory stage such as acquisition of buildings, plant and machinery in a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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