2015 (12) TMI 617

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ts and in the circumstances of the case and in law the CIT(A) erred in disallowing as business expenditure the sum of Rs. 2,69,275/- incurred by the appellant for maintaining and running and further not allowing the set off of the same as per the provisions of section 71 of the I.T. Act against the interest income assessed under the head income from other sources." 3. It is seen by us that aforesaid ground is modified ground and does not require any examination of new facts. Therefore, after obtaining consent of both the parties in this regard, this ground is admitted for adjudicating this appeal. 4. Brief facts as per assessment order are that the assessee was in the business of dealing in immovable properties and development rights ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... section 3 of the Income Tax Act 1961, and the same is reproduced here for the sake of ready reference: "3. For the purposes of this Act, "previous year" means the financial year immediately preceding the assessment year: Provided that, in the case of a business or profession newly set up, or a source of income newly coming into existence, in the said financial year, the previous year shall be the period beginning with the date of setting up of the business or profession or, as the case may be, the date on which the source of income newly comes into existence and ending with the said financial year." (emphasis supplied) The perusal of aforesaid clause would show that relevant date for commencement of the busine....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ting up of the business, even if commencement of business has not yet taken place: 1.CIT Vs. Ralliwolf Ltd. (121 ITR 262) (Bom) 2.Saurashtra Cement & Chemical Industries Ltd. (91 ITR 170) (Guj) 3.Western India Vegetable Products Ltd. (26 ITR 151) 4.Ramaraja Surgical Cottons Mills Ltd. (63 ITR 478) 5. CIT v. Whirlpool of India Ltd 318 ITR 347 (Delhi High Court) In the case of CIT vs Sardar Sarovar Narmada Nigam Ltd 364 ITR 477 (Guj) it has been held that where business of the assessee consists of different categories, then company can be said to have set up its business from the date when one of categories of its business was started and all the revenue expenditures after such date are allowabl....