TMI Blog2018 (5) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... was difficult to understand how the staff was paid bonus as claimed by the assessee. Tribunal further recorded that there was no evidence on record to suggest that the assessee has registered itself as a trading concern or had procured statutory licenses from the State or the local authorities. There is nothing on record to suggest that the assessee had actively solicited business and the negotiations in the parlance buyers and sellers were at advance stage or were at any concrete form. There was significant time gap in such correspondences and actual sale and purchase transaction. - Decided against assessee. - Tax Appeal No. 16 of 2018 - - - Dated:- 26-2-2018 - MR. AKIL KURESHI AND MR. B.N. KARIA, JJ. For The Petitioner : Mr Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure principally involved the directors' remuneration and salary and bonus to the staff. The Assessing Officer confronted the assessee with the question that there was no business activity carried on by the company during the said period to which the assessee contended that the company had commenced the business activity of trading in iron and steel during the year under consideration. By making market survey, by contacting various customers (retailers) and in support of which, letters written to the customers were produced. The assessee pointed out that letters were also written to the rerolling mills to inquire about the source for procurement of these items. The assessee contended that actual sales may have taken place in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Tribunal committed an error in not appreciating the nature of activities carried on by the assessee in proper prospective. To establish commencement of business, it is not necessary to show actual sale or purchase of commodity. The assessee had carried out initial activities which later on fructified into actual sales. It cannot be stated that no business activities were carried on. Heavy reliance was placed on decisions of Delhi High Court in following cases: (I) In case of CIT vs. Samsung India Electronics Ltd. reported in (2013) 356 ITR 354 (II) In case of Carrefour WC C India P. Ltd. vs. DCIT reported in (2014) 368 ITR 692 (Del) 7. Question of commencement of business is essentially one of facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... important evidence to demonstrate that the business activity had commenced. Such evidence was analyzed by the authorities. Primarily, the correspondence was in the nature of market survey. There is nothing on record to suggest that the assessee had actively solicited business and the negotiations in the parlance buyers and sellers were at advance stage or were at any concrete form. There was significant time gap in such correspondences and actual sale and purchase transaction. 9. The decisions of Delhi High Court were based on facts presented before it essentially showing active groundwork of the business of manufacturing or in trading and were distinguishable. 10. In the result, Tax Appeal is dismissed. - - TaxTMI - TMITax - In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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