Business commencement depends on substantial commercial activity, not merely tenant occupation or rent payment.

A business is treated as commenced when the assessee undertakes substantial commercial activities that form part of the business itself, and not only when a tenant or licensee actually occupies the premises or starts paying rent. Here, the assessee had gone beyond mere acquisition of property by finding a customer, carrying out repairs, rewiring, installing a lift, and adapting the premises for business and storage use. The Tribunal's contrary view rested on a misapprehension of the nature of the business and was vitiated by misdirection in law. The High Court was therefore justified in interfering, and the appeal was dismissed.

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Issues: Whether the assessee's business had commenced during the relevant previous year, and whether the Tribunal's contrary finding could be interfered with on the ground of misdirection in law.

Analysis: The assessee had not merely acquired property for future letting but had also undertaken substantial activities in relation to the property during the previous year, including finding a customer, carrying out repairs, rewiring, installing a lift, and adapting the premises for business and storage use. These activities were part of the business itself and were not confined to a preliminary or preparatory stage. The business could not be treated as commencing only when the licensee or lessee occupied the premises or began paying rent. The Tribunal's approach proceeded on a misapprehension of the nature of the assessee's business and was therefore vitiated by misdirection in law.

Conclusion: The business had commenced during the relevant previous year, and the High Court was justified in interfering with the Tribunal's finding. The appeal failed and was dismissed.

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