Appeal under Section 260A of the Income Tax Act, 1961 (the Act) challenges the order dated 19th August, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order is in respect of Assessment Year 2007 – 08.
Question of Law
Whether on the facts and circumstances of the case and in law, the Tribunal was correct in allowing as a deduction the expenses claimed by the assessee in its Profit and Loss Account for the year ended 31st March, 2007 without appreciating that the business of the Assessee Company was not set up during the previous year relevant to Assessment Year 2007 – 2008?
Facts of the case
The Respondent – Assessee is an asset management Company. The respondent – assessee had shown the business loss of Rs.1.17 crores. The Assessing Officer disallowed the business loss claimed by the respondent – assessee on the ground that business has not been set up during the year under consideration. Being aggrieved, the respondent – assessee carried matter in appeal to the Commissioner of Income Tax (Appeal) [CIT (A)] who upheld the order of Assessing Officer disallowing business loss of Rs.1.17 crores. According to the Revenue, there is no distinction between setting up of business and commencement of Business. Therefore, no expenditure incurred before commencement of business can be allowed.
Being aggrieved the respondent – assessee filed further appeal to the Tribunal.
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