TMI Blog2019 (3) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has deliberately given the advances in the market for earning the interest. Hence, we concur with the view of the AO on the point that the interest earned by the assessee from giving loan by the assessee in the market is income from other sources and not the business income. Set off of business loss against the interest income as per the provisions of Section 71 - HELD THAT:- Since the assessee already commenced the business in the F.Y. 2005-06 and has now incurred expenditure on account of advertisement, exhibition, consultancy charges which are an allowable business expenditure, then the said business expenditure will be business loss for the year under consideration for want of any business income and consequently the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from other sources and at the same time not allowing the business loss which the assessee has made it as a part of stock-in-trade, such amount has been taxed twice. 3. The assessee craves to amend, alter and modify any of the grounds of appeal. 4. The appropriate cost be awarded to the assessee. 2. The assessee is a company incorporated on 08/02/2005 with the object to construct commercial and residential complex. The assessee company participated in the auction for purchase of commercial land from Jaipur Development Authority (JDA) and was highest bidder. The assessee was accordingly allotted the land measuring 4643.36 sq.mt. at Swej Farm Scheme, New Sanganer Road, Jaipur vide letter dated 18/4/2006 for consideration of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer before the ld. CIT(A) but could not succeed. 3. Before us, the ld AR of the assessee has submitted that once the assessee commenced its business in the F.Y. 2005-06 itself then the interest on the surplus amount is nothing but business income of the assessee. Since the assessee has incurred expenditure of ₹ 16,39,112/- under various head, which are mainly on advertisement, exhibition expenses, consultancy charges etc., therefore, the outcome is business loss under the head profit and gain of business. Thus, the ld AR has submitted that the receipt of interest of ₹ 11,61,823/- is assessable as business income under the head profit and gains of business and thus, the net business loss is assessable to tax. Alterna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment of the land by the JDA has also received advance booking amount of ₹ 1.25 crores and in that process the assessee has incurred an expenditure of ₹ 16,39,112/- under the head advertisement, exhibition expenses, consultancy charges etc.. Thus, these activities of the assessee clearly reveals the commencement of the business by the assessee. Even otherwise the Assessing Officer while dealing with the issue has accepted the fact that the assessee has commenced its business in the F.Y. 2005-06. The relevant part of the Assessing Officer s finding is as under: A private limited company can start business immediately after incorporation and does not require any certificate to commence business. Perusal of company financial s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the view of the Assessing Officer on the point that the interest earned by the assessee from giving loan by the assessee in the market is income from other sources and not the business income. However, since the assessee already commenced the business in the F.Y. 2005-06 and has now incurred expenditure of ₹ 16,39,112/- on account of advertisement, exhibition, consultancy charges which are an allowable business expenditure, then the said business expenditure will be business loss for the year under consideration for want of any business income and consequently the interest income assessed as income from other sources would be set off against the business loss as per the provisions of Section 71 of the Act. Therefore, we find me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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