TaxTMI 
TaxTMI 
2024 (3) TMI 661
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....f the assessing officer in disallowing claim of expenditure to the extent of Rs. 62,47,234/- on the misconceived ground of non-carrying of business activity during the year under reference. (ii) That the appellant having commenced its business and the claim of expenditure being of routine nature and wholly and exclusively incurred for the purpose of business, the upholding of disallowance by CIT(A) is highly arbitrary and without any basis. (iii) That non-earning of revenue per se being not relevant for the purpose of valid claim of expenditure which is otherwise incurred for the purpose of business, the impugned disallowance is illegal and wholly misconceived. (iv) That in absence of any dispute with regard to genuineness and veracit....
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....ame and the same was shown as inventory in the balance sheet and, therefore, the business loss claimed by the assessee cannot be disallowed. However, not convinced with the submissions the AO disallowed the expenditure/loss claimed by the assessee. On appeal the Ld.CIT(Appeals) sustained the view of the AO. 4. Before us, the ld. Counsel for the assessee submits that the appellant company was incorporated in the year 2013 with primary object of dealing in real estate. There is no dispute with regard to genuineness of claim of expenses which is duly supported from documentary evidences and the disallowance is only on technical ground that in absence of any income from business operation, the claim of expenses is not allowable. 4.1 Ld. Couns....
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....his very fact Is also corroborated from the order of assessing officer and CIT(A), however, the sub-ordinate authorities failed to appreciate the legal position to this effect. Under these circumstances, upon purchase of property for real estate dealing, the appellant assessee has clearly commenced its business and as such there remains no ground or basis for any disallowance of expenses. It is submitted that nonearning of income per se cannot he the ground for disallowing claim of expenses. 5. Ld. Counsel for the Assessee placing reliance on the decision of the Jurisdictional High Court in the case of CIT Vs. Dhoomketu Builders & Development P. Ltd. (368 ITR 680) submits that on identical circumstances the claim for expenses was allowed h....
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....d as under: - "There is a difference between the setting up and commencement of business. When a business is established and is ready to commence business then it can be said of that business that it is set up. But before it is ready to commence business it is not set up. But there may be an interregnum, there may be an interval between a business which is set up and a business which is commenced and all expenses incurred after the setting up of the business and before the commencement of the business, all expenses during the interregnum, would be permissible deductions. The question as to when a business can be said to have been set up is a question of fact to be ascertained on the facts and circumstances of each case and considering the....