TaxTMI 
TaxTMI 
2019 (12) TMI 77
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.... and Industries Ltd ("the assessee") was incorporated to carry on the business of fertilisers and urea and all classes and kinds of chemicals including petrochemicals and plastics. For theAssessment Year 2012-13, they have filed return of income on 29/9/2012 declaring a taxable income of Rs. 1,14,90,960/-. During the course of assessment proceedings, learned Assessing Officer found that the business of the assessee was not commenced during the year and treated the declared income of the assessee as other income and disallowed the expenses claimed by the assessee on that ground. 3. Assessee's appeal was dismissed by the Ld. CIT(A) on the ground that in view of the decision of the Hon'ble Apex Court in the case of Tuticorin Alkali Chemical....
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....tional ground. 5. Ld. DR placed reliance on the orders of the authorities below and stated that the main objective of the assessee company is business of manufacture and trade of fertilisers and urea, the investment activity pleaded by the assessee is a stranger to this activity which amounts to finance activity which does not form part of the manufacture and the trading activity. They further submitted that even otherwise also the company in which the assessee made investments, namely, Duncan industries, had not commenced the business and, therefore, it cannot be said that the assessee had actually commenced the business. 6. We have gone through the record in the light of the submissions made on either side. Assessee had produced the....
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....Rs. 460.21 crores. It is further noted by the Assessing Officer that from the Annexure toAuditor's Report,it was found that the BIFR vide order dated 16/01/2012 had approved the scheme in which, the assessee company had entered into an arrangement on renovation and up-gradation of existing assets of fertilisers unit of Duncan industries Ltd. to Kanpur Fertiliser and Cements Limited for the same funds in the form of investment in shares capital have been given to Jaypee Uttar Bharat Ltd which in turn had invested the funds in Kanpur Fertilisers Limited. 8. The entire case of the Revenue revolves around the observations of the Assessing Officer that the finance activity of making investment in similar business does not fit in the business ....
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.... scheme. In the absence of any rebuttal on this aspect, we do not entertain any doubt that the Duncan industries Ltd was pursuing similar objects as those of the assessee and fits into the description given by the assessee in the Memorandum of Association vide "Main objects to be pursued by the company on its incorporation" and by making such investment the assessee could be said to have commenced the business. 10. In Carefour WC&C India Private Limited vs. Deputy Commissioner of Income-tax,ITA No.42/2014 (order dated 22ndSeptember, 2014), Hon'ble Jurisdictional High Court, held that merely because actual sales and purchase of products did not happen during the subject financial year, which is not a necessary condition/activity in order ....