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TMI Blog2013 (9) TMI 1223X X X X Extracts X X X X X X X X Extracts X X X X ..... set up the business during the year, therefore, since the business during the year has not been commenced, depreciation and expenditure claim to the extent of ₹ 2,95,145/- and ₹ 18,970/- respectively can not be allowed as revenue expenditure which was to be capitalized. The assessee contested the proceedings stating that AO examined the issues at the time of completion of the assessment. It was submitted that assessee s business activity started in March, 2004 in assessment year 2004-05 when the lease agreement was entered by assessee with MIDC and further these aspects were examined in assessment year 2006-07 wherein AO was of the view that the business has not commenced in that year, whereas the ld. CIT(A)-21 vide his appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Counsel in reply submitted that the assessee was not only developing a biotech park but also sub-leasing plots which were obtained from MIDC and sub-leasing of flats was part of the business activity ready during the year and referred to the income received later in the year of ₹ 4,05,29,208/- on sub-leasing of the plots and finding of the ld. CIT(A) in assessment year 2006-07 to state that assessee commenced business by entering into lease agreement with MIDC for land in March, 2004. 3. We have considered the rival contentions and examined paper book on record and also various case law relied upon by the parties. As seen from the order of CIT u/s. 263, the main thrust of the argument was on the basis of findings given by Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove referred order in assessment year 2006-07 in assessee s own case. Therefore, we are of the opinion that the assessee did commence its business activity by entering into lease of land in March 2004 in assessment year 2004-05 and setting up business activity in 2005-06 by incurring expenditure for developing the land and ultimately received income by sub-lease of land in assessment year 2006-07 which were accepted as assessee s business activities. In the light of the facts, we do not see any merit in the contention of the CIT that assessee has not set up business activity. 4. It is also surprising to see that total expenditure claimed in Profit Loss A/c. was of tune of ₹ 61,28,430/- which include personal expenses of ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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