TaxTMI 
TaxTMI 
2023 (5) TMI 685
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....rder passed by the Hon'ble Commissioner of Income Tax (A)-II Ahmedabad is bad in law, contrary to legal pronouncements and same be quashed. 2. The Hon'ble Commissioner of Income Tax (A) has erred in disallowing the expenses claimed of Rs. 55,72,316/- on the ground that the business is not set up. It is respectfully submitted that in view of the facts and law stated in the statement of facts, the learned CIT (A) ought to have allowed the expenses claimed for the purpose of business of Rs. 55,72,136/-. It is further submitted that learned CIT(A) ought to have considered evidences filed before him to prove that the business of the appellant was set up and was ready to commence. 3. The Hon'ble commissioner of Income Tax (A) has further erred in taking a view that the business of the appellant has not commenced and there by confirmed the learned AO's stand treating the expenditures as capitalization expenditure being pre operative in nature. It is submitted that the learned CIT(A) is completely in error in not appreciating this submissions made before him that the business of the appellant is set up as explained and submitted with facts and law and hence this expen....
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....s under: 2.5. Having considered all the details and submission and decision / judgment cited before him, the AO observed that the business of the appellant was not set up during the year under consideration and hence the claim of other expenses of Rs.55,71,244/- was not allowable as deduction during the year under consideration. But he allowed the capitalisation of such expenditure towards the cost of the project. 2.6. On the other side, the appellant has claimed that the business of the appellant has been set up and in support it has relied upon the following evidences. (i) Resolution of BOD regarding commencement of business, (ii) A certificate of commencement of business, (iiij MOU with GSBTM of Gujarat Government. 2.7 Further, claimed that the appellant company has commenced its business since the compound wall in the project has constructed and the appellant has applied for various approvals to the State Government Authorities. 2.8 Having considered the facts and submissions, it is found that as per the requirement of Section 37(1) of the 1. T. Act, any expenditure not being in the nature of capital expenditure laid out or expended wholly and exclusively fo....
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....t could be termed as commencement of business. Without the approvals, the appellant has not completed the construction of units. Merely constructing the compound wall would not itself be the commencement of the business, but it was just to secure and safe the possession of the land. The construction of compound wall would not itself constitute the commencement of the business. Even as per the letter dated 28/01/2011, addressed to the M. D. of GSBTN, the appellant itself has clarified that unless we execute formal lease deed with GIDC the company cannot commence the physical project activity neither other utilities (like power / water etc.] can be called nor financial closure can be achieved. Thus, it amply proved that no physical project activities were started even up to 28/01/2011 i.e. date of aforesaid letter and even in the assessment proceedings the appellant confirmed the status-quo of the same stage of work. 2.12. The case laws relied upon by the appellant are on different facts and the same are not applicable over the facts of the case. The AO has also relied upon the various judgments as briefly discussed in Para 3.8 of the assessment order. During the course of appella....
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....15/08/1995. So the Hon'ble Court has held the commencement of the business w.e.f. 15/08/1995. But, in the present appeal, appellant has not given any details and evidences of having entered into any agreement for development of the Biotechnoiogical Park or of setting up of any units by any of its customers. Even, it has not attained any legal maturity, so as to make any agreement for establishment of the units by the customers, obviously in absence of necessary approvals from the State Government The other case laws cited by the appellant are also not applicable due to difference on facts. It is also worth here to mention that, in any case, the appellant is going to take the deduction of the pre-operative expenditures against the income in the subsequent years and on the contrary by claiming the carry forward of business loss, the appellant had the limitation of setting off of such business losses up to the period of subsequent 8 years only. Thus, the appellant has the gain on the proposition of the AO. 2.14. In view of the aforesaid discussion, the AOs stand treating the expenditures as capitalisation expenditure, being pre-operative in nature is found correct and jus....
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.... perused the materials available on record. Before going to the issue whether the business of the assessee was set up and commenced in the year under consideration, I note that the assessee was allowed similar expense and depreciation in the earlier years which has resulted loss from the business as evident from the Income Tax Return. The relevant details of the business loss claimed by the assessee is extracted at page 44 of the paper book. Accordingly, in my considered view the principles of consistency need to be adopted as there is no change in the facts before us as well as law with respect to the issue raised by the assessee. The Ld. DR at the time of hearing has also not brought anything on record contrary to the arguments advanced by the Ld. counsel for the assessee. Accordingly, keeping the principles of consistency, I set aside the findings of the Ld. CIT(A) and allow the grounds of appeals raised by the assessee. Hence, the ground of appeal of the assessee are allowed. 10. The next issue raised by the assessee is that the Ld.CIT(A) erred in confirming the addition made by the AO for Rs. 44,44,000/- on account of violation of the provisions of section 43B of the Act. 11....
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.... expense has not been doubted by the authorities below. The expense claimed by the assessee was disallowed mainly on the reasoning that the conditions specified u/s 43B of the Act were not satisfied. Admittedly, the expense in the present case is to be allowed on payment basis under the provisions of the section 43B of the Act. Accordingly, I set aside the order of the Ld.CIT(A) with the direction to the AO to allow the impugned expense on payment basis as per the provision of section 43B of the Act. Hence, the ground of appeal of the assessee is allowed for statistical purposes. 16.1 In the result the appeal of the assessee is partly allowed for statistical purposes. Coming to ITA No.1014/Ahd/2018, an appeal by the assessee for A.Y 2013-14 17. At the outset, I note that the issues raised by the assessee in its grounds of appeal for the A.Y 2013-14 are identical to the issues raised by the assessee in ITA No. 3555/AHD/2015 for the assessment year 2012-13. Therefore, the findings given in ITA No. 3555/AHD/2015 shall also be applicable for the assessment year 2013-14. The grounds of appeal of the assessee for the AY 2012-13 have been decided by me vide paragraph No. 9 of this ord....