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TMI Blog2013 (10) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... t) and Rs.2,32,582/- on account of travel/statutory fees/audit fees etc can be allowed as expenditure under Section 37 of the Act. 3. The Assessing Officer had disallowed the said amounts as expenditure under Section 37/36(1)(iii) on the ground that the business of the assessee had commenced/was set up on 5th July, 2006. Loan from M/s Dharti Investments and Holding Limited, it is stated, was taken on 16th May, 2006. Learned counsel relies upon judgment of this Court dated 9th July, 2013 in ITR No. 131/2010, titled Commissioner of Income Tax versus Samsung India Electronics Limited. Our attention was drawn to the fact that Memorandum of Understanding between the respondent and third parties is dated 30th May, 2006 and not 31st March, 2006, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sublet or sublease all type of lands, plots, buildings, hereditaments, bungalows, quarters, offices, flats, swimming pools, chawls, warehouses, godowns, shops, stalles, markets, hotels, and restaurants building, banquet halls, houses, structures, construction, tenements, roads, bridges, land, estates and immovable properties whether freehold or lease hold of any nature and description and where ever situated in way and partly consideration for a gross sum or rent or partly in one in other or any consideration. 4. To act as an agent for purchasing, selling, and letting on hire, land and houses whether multi-storey, commercial land/or residential buildings on commission basis. 5. To consolidate or subdivide, develop, maintain, purchase, se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r "to establish', and in contradistinction to "commence'. The distinction is this that 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 under section 10(2).' 6. The aforesaid distinction is relevant when we examine and refer to the definition of "previous year'. It is well settled that "date of setting up of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment by the respondent-assessee into the joint venture agreement. Setting up of business takes place when the business is ready and first steps are taken. In case of real estate business, the said setting up of business was complete when first steps were taken by the respondent-assessee to look around and negotiate with parties. There can be a gap between setting up and when first steps were taken by the respondent and finalisation of the first written agreement. Business activities of the respondent did not require construction of a factory, machinery etc. Negotiations are required to enter into a written understanding and it is obvious that the loan was taken for business and to proceed further and conclude the deal. The aforesaid facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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