TMI Blog2020 (10) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... albeit from its holding company and deposited the same on the same day, it shows that the assessee's business had been set-up and it was ready to commence business. Difficulty in accepting the argument of revenue stating that till the land is acquired, the business is not set-up is that an assessee may not be successful in acquiring land for long period of time though he is ready to commence his business in real estate, and that would result in the expenses incurred by him throughout that period not being computed as a loss under the head 'Business' on the ground that he is yet to set-up his business. That would be an unacceptable position. As seen from the evidence filed by the assessee, the assessee has already commenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure of ₹ 65,86,244 to the extent of loss claimed was disallowed. 4. The CIT(Appeals) observed that the expenditure claimed by the assessee was directly related to construction activity and it can be allowed only once the said project is completed or capable of yielding income. According to him, the expenditure cannot be allowed unless the assessee earns income from the project. Against this, the assessee is in appeal before us. 5. We have heard the parties and perused the record. The main contention of the ld. counsel for the assessee is that to claim expenditure, the assessee has to set up and commenced the business. In the present case, he drew our attention to the copy of Commencement Certificate issued by BBMP vide or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the record. In our opinion, there is merit in the plea of assessee. The Hon ble Delhi High Court in the case of CIT v. Dhoomketu Builders Development (P) Ltd., 34 taxmann.com 18 (Delhi) has held that having regard to the business of the assessee, which is the development of real estates, the participation in the tender represents commencement of one activity which would enable the assessee to acquire the land for development. If the assessee is in a position to commence business, that means the business has been set-up. The Acts of applying for participation in the tender, the borrowing of monies for interest from the holding company, the deposit of the borrowed monies on the same day with as earnest money were all Acts which clearly es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness' on the ground that he is yet to set-up his business. That would be an unacceptable position. The other argument of the revenue that the tax auditors of the assessee have themselves pointed out that the assessee is yet to commence its business is also relevant because of the distinction between the commencement of the business and setting-up of the same. 7. As seen from the evidence filed by the assessee, the assessee has already commenced its business by entering into agreement with the landlord and also requisite licence and permission from BBMP. It cannot be said that assessee has not commenced the business. Hence the assessee is entitled to claim deduction. Accordingly, we allow the ground raised by the assessee. 8. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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