9911796707
TMI Blog2018 (11) TMI 1656X X X X Extracts X X X X X X X X Extracts X X X X ..... During the course of assessment year 2012-13, the assessee company has prepared its profit and loss account for the first time since its operation disclosing interest document fees, license fees, scrutiny fees and water charges and claimed deduction of various administrative office expenses. Subsequently, the assessee company has also claimed deduction of depreciation by filing revised return of income. CIT(A) has also referred the decision of Saurastra Cement and Chemical Ltd. vs. CIT [ 1972 (8) TMI 19 - GUJARAT HIGH COURT] wherein it is held that the business would commence when the activity which is first in point of time and which must necessarily precede the other activity is started. As soon as a activity which is an essential activity in the course of carrying on the business or which in other words is a business activity is started the assessee must be held to have commenced the business. The nature of business of the asssessee company was to develop various common facilities and the material facts as elaborated in this order substantiate that the business of the assessee company was set up during the year under consideration. We observe that all these evidences c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessing officer noticed that as per note no. 18 of the account, the assessee has debited the following expenses in the profit and loss account:- Internal Audit Fees ₹ 275752 Statutory Audit Fees Rs, 447526 Director's Sitting Fees ₹ 428000 Filing Fees and Professional Tax ₹ 5423 Electricity Chargers ₹ 1124116 Rent ₹ 4284450 Repairs Maintenance (Office Bldg.) ₹ 242934 Transferred from PDE pending allocation ₹ 17210600 ------------------------ ₹ 24018801/- To verify the nature of above expenditure the assessee was called upon to furnish the project report along with other particulars like total cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agar as a Greenfield development. GIFT is designed as a hub for the global financial services sector. More particularly, state-of-the-art connectivity, infrastructure and transportation access have been integrated into the design of the city, it is the Company who is looking after development of GIFT. GIFTCL is incorporated on 21 June, 2007 with equal shareholding of Gujarat Urban Development Company (GUDC), a 100% Government of Gujar.at owned company arid Infrastructure Leasing Financial Services Limited (IL FS) GIFTCL is a Board managed Company with Government of Gujarat nominating four senior Government Officials as directors including Chairman of the Company who has a second or casting vote. GIFT Project is a public project and structured to provide the required quality infrastructure and facilities. Development of the much required activities for the envisaged Global Financial Hub is the object. For developing the required infrastructure and facilities, jt would require 'support from Government and Government agencies, Keeping this in view, Government of Gujarat has transferred the required land in April, 2011 at a nominal cost of Re. 1 and surplus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply to GIFT r,Zone 07/11/2011 06/11/2013 05/11/2016 16.44 Construction of SubArterial Roads in GIFT Area (DTA) 02/01/2012 15/06/2012 31/12/2016 31.74 Construction of Gabion wall In GIFT 16/01/2012 14/07/2012 14/07/2012 2.51 Street lighting with area lighting for Access road from Shahpur side to GIFT 13/01/2012 11/07/2012 11/07/2012 0.56 Water (WTP STP) 13/05/2012 09/12/2012 08/12/2017 16.23 District Cooling System(Building level) 01/08/2012 24/11/2013 23/11/2018 77.10 66/35kv substation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid that assessee had commenced its business in 1958 when it started activity of extraction of limestone by quarrying leased and, therefore, expenditure incurred by assessee in carrying on activity of extraction of limestone as also depreciation allowance and development rebate in respect of machinery employed in extracting limestone were deductible in computing trading profits of assessee-Held, yes Thus the Hon'ble Gujarat High Court established principles of Setting Up as under: The business would commence when the activity which is first in point of time and which must necessarily precede the other activities is started... Further, in the case of Saurashtra Cement the Hon'ble jurisdictional High Court has also held as under: ... ..... The term business connotes a continuous course of activities. All the activities, which go to make up the business, need not be started simultaneously in order that the business may commence. The business would commence, when the activity which is first in point of time and which must necessarily precede all other activities, is started. It was further held that in order to determine the question whether, the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of Urban Development and Urban Housing Department No.GH/V/116 of 2011/GIFTv 102011-2523-L dtd.22-07-2011. 4. Recommendation for Seismic Design for GIFT Project received from Institute of Seismological Research vide Letter dtd.16.05.2011. 5. Notification of Urban Development and Urban Housing Department, Government of Gujarat dtd.19.10.2011 regarding approval of General Development Control Regulation for the GIFT Area. 6. Collector Order dtd.15.04.2011 vide which the State Government has transferred 662 acres of land to GIFTCL (412 acres) and its subsidiary Company GIFT SEZ Ltd. (250 acres) at a token value of Re.l/- in financial year 2011-12. 4.2.4 As mentioned above, the objective of the appellant company is to design, develop, business, construct, operate and maintain Gujarat International Finance Tech. City (GIFT City). In pursuance to these objectives, it is seen that the appellant has acquired land, obtained environmental clearance, received NOC from Airport Authority of India, received recommendation from the Institute of Seismological Research and has also received an approval from the Urban Development and Housing Department fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted paper book containing detail and submission made before assessing officer and ld. CIT(A). The ld. counsel has also furnished paper book containing various judicial pronouncements on which reliance was placed . 7. We have heard both the sides and perused the material on record carefully. The assessee company has filed its return of income for the year under consideration on 14th August, 2012 declaring total income at ₹ 2,59,93,609/-. To demonstrate that the business of the assessee company has been set up the assessee company has submitted the following details during the course of assessment proceedings:- (a) Collector Order dtd.15.04.2011 (in Gujarati and its English Translated version) for the financial year 2011-12 (b) Details of the Tender floated for the purpose of infrastructure work (c) Details of major infrastructure works for which Letter of Intent was issued to the contactors in FY 2011-12 The nature of business of the assessee company was to design, develop, finance, construct, operate and maintain Gujarat International Finance Tech. City (Gift City). The company had engaged specialized consultant to unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
