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TMI Blog2019 (11) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... directing the AO to obtain the details of expenses of ₹ 8,66,73,393/- out of the expenses disallowed of ₹ 10,28,95,398/- pertaining to the period from 07.07.2008 till 31.03.2009 and allow the same as deduction in the year under consideration. The grounds raised by the Revenue are accordingly dismissed. - ITA No.3433/Del/2016 (Assessment Year: 2009-10) - - - Dated:- 30-10-2019 - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER Assessee by: Shri S.K. Aggarwal, CA Revenue by: Ms Nidhi Srivastava, CIT, DR ORDER PER R.K. PANDA, AM: This appeal filed by the Revenue is directed against the order dated 31st March, 2016 of the CIT(A)-1, Gurgaon, relating to assessment year 2009-10. 2. Facts of the case, in brief, are that the assessee is a company engaged in the business of providing technological and personnel support to food processing and dairy industry. It filed its return of income on 24th September, 2008, declaring the total income at nil, after claiming losses. The Assessing Officer, during the course of assessment proceedings, obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the operations were taken on employment which includes sales head. These employees were sent on training with a view that the main purpose of the assessee company of providing technological support to food processing and dairy industry is met. It was further submitted that during the impugned assessment year, the assessee had key management personnel at its pay roll to carry out its business activities. The assessee has appointed Mr. Anuj Mehta, Senior Manager, Quality and Mr. Sanjay Sharma, National Sales Head. During the year, it had employed a strong management team to carry out its business. Thus, the business of the assessee was, in fact, set up during the assessment year. It was submitted that various key personnel including the Managing Director, Finance Director, Sales Distribution Director, Marketing Manager, Legal Company Secretary, Finance Manager, were already on the assessee s pay roll during the subject assessment year. It was further argued that the assessee, during the impugned assessment year undertook various activities to fulfill its key objectives such as promotion of and participating in the promotion of subsidiary, act as an investment company and acquire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the appellant craves for the permission to add, delete or amend the grounds of appeal before or at the time of hearing of appeal. 7. The ld. DR strongly challenged the order of the CIT(A). She submitted that the assessee has not explained what are the actual dates of the recruitment of the persons nor filed copies of the agreement. Therefore, the various submissions made by the assessee cannot be relied upon. She submitted that the Assessing Officer has given justifiable reasons why the expenses should not be allowed since the assessee has not started its business and has not received any income from its business activities. She accordingly submitted that the grounds raised by the Revenue should be allowed and the order of the CIT(A) be set aside and that of the Assessing Officer be restored. 8. The ld. counsel for the assessee, on the other hand, heavily relied on the order of the CIT(A). He submitted that when the assessee had appointed its sales head, it was the last recruitment. Referring to copy of the letter addressed to the Assessing Officer on 6th September, 2011, copy of which is placed at pages 106 to 109 of the paper book, the ld c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of the assessee has been set up on 07.07.2008 and, therefore, the assessee is entitled to claim the various expenses pertaining to the period after setting up the business on 07.07.2008 till 31.03.2009. Relying on the decision of the coordinate Bench in the case of Dhoomketu Builders Development Pvt. Ltd. vs. Additional Commissioner of Income Tax (supra), the ld.CIT(A) directed the Assessing Officer to allow the expenses for the period from 07.07.2008 till 31.03.2009 amounting to ₹ 8,66,73,393/- after obtaining the details of expenses. We do not find any infirmity in the order of the CIT(A). We find, the ld.CIT(A) while allowing the claim of the assessee with certain directions has relied on the decision of the coordinate Bench in the case of Dhoomketu Builders Development Pvt. Ltd. vs. Additional Commissioner of Income Tax (supra), where it has been held as under:- The sole issue is whether the assessee is able to demonstrate that its business in respect of real estate development was set up during the relevant accounting period and, therefore, it is entitled for carry forward of net business loss suffered in the year. Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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