2023 (6) TMI 273

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....der passed u/s. 143(3) of the Act as invalid and bad in law and has also challenged the disallowance of operative expenses of Rs.15,29,595/- and interest paid on late payment of TDS amounting to Rs.12,980/- debited to profit and loss account. 3. The brief facts of the case are that the assessee is a limited liability partnership firm engaged in the business of wholesale distributors and Indian made foreign liquor. The assessee filed its return of income dated 01.10.2018, declaring total income at Rs.Nil. The assessee's case was selected for scrutiny and the assessment order dated 15.04.2021 was passed by the Assessing Officer (A.O. for short) u/s. 143(3) of the Act by making various additions/disallowances. 4. The assessee was in appeal b....

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....essee) vide LLP dated 23.11.2017 by way of registration for conversation which was granted by the Registrar, ROC dated 08.12.2017 under the Limited Partnership Act, 2008. The assessee further contended that the erstwhile company had filed its return of income for A.Y. 2017-18 on 10.11.2017 which establishes the fact that the assessee's business commenced during F.Y. 2016-17. The impugned disallowance made on pre operative expenses was pertaining to F.Y. 2017-18 and the same was debited to the profit and loss account. The ld. CIT(A) had relied on the decision of the Tribunal in the case of Maruti Insurance Pvt. Ltd. vs. DCIT (Del) dated 10.02.2020 which held that the expenses incurred prior to the operation of the company are not liable as '....

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.... that the impugned expenses was in the nature of 'preoperative expenses' and not 'business expenses' considering the date of incorporation of the LLP firm. The ld. DR relied on the order of the lower authorities. 11. We have heard the rival submissions and perused the materials available on record. It is observed that the partnership firm M/s. Sunder Spirits formed on 09.12.2016 was changed to name and style of M/s. Living Liquidz S M Traders LLP and which was subsequently converted to LLP vide deed dated 23.11.2017. From the recitals of the partnership deed dated 09.12.2016, 15.10.2017 and 23.11.2017, we infer that the object and the purpose of these are identical and was merely a continuation of the initially incorporated firm, i.e., M/s....