TaxTMI 
TaxTMI 
2016 (2) TMI 488
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....ing leasing and to act as developer of private information technology parks. The Assessee filed its return of income for the AY 2009-10 on 23/09/2009 admitting loss of Rs. 8,94,094. The assessment was completed u/s 143(3) on 17/05/2011 and total income of the assessee was determined at loss of Rs. 8,94,094. 3. Subsequently, CIT, by virtue of his powers vested u/s 263 of the Income-tax Act, 1961 ( in short 'Act'), assessment records were called and examined by him. Based on the following observation by him, he directed the AO to carry out the verifications on the below observations and redo the assessment since the AO completed the assessment without making proper verification, which was erroneous and prejudicial to the interests ....
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....he above lands were purchased during the FY 2006-07. It shows that the business is set up. The purchase was materialized in July, 2006 but the similar negotiations, etc., were commenced from the day, the company was incorporated. 6.1 The ld. AR also submitted that the assessee was filing its return of income since incorporation and it was duly accepted by the department. He submitted that the assessee was eligible to claim business operative expenditure and interest income should be treated as business income. The ld. AR relied on the following cases to support his contentions: 1 Western India Vegetable Products Ltd. v. Commissioner of Income-tax [1954] 26 ITR 151 (BOM.) (HC) 2 CIT v. Arcane Developers (P.) Ltd [2014]42....
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....nd development of technology park. In this line of business, the process commences from the date of negotiation for acquiring land, actual purchase of the land and then actual development of such land. The concept of commencement will change according to the nature and facts of the particular industry. It may vary depending upon the business model and business cycle of the industry. In the present case under consideration, the business said to have set up, when it is ready or established to commence its operation, for which, we refer to the case law Western India Vegetable Products Ltd., 26 ITR 151 (Bom.). Similarly, in the case of Arcane Developers (supra) date of setting up of business depends upon facts and the nature of the business. Th....
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....e the land is acquired the assessee may be said to have actually commenced its business which is that of development of real estate. The actual acquisit ion of the land may be a f irst step in the commencement of the business, but section 3 of the Act does not speak of commencement of the business, it speaks only of sett ing-up of the business. When the assessee in the present case was in a posit ion to apply for the tender , borrowed money for interest albeit from its holding company and deposited the same with NGEF Ltd. on the same day, it shows that the assessee's business had been set-up and it was ready to commence business. The learned senior standing counsel for the revenue would, however, state that t ill the land is acquired, t....