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TMI Blog2021 (1) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction, illegal, bad in law and void ab initio. 2. Whether on the facts and circumstances of the case the Ld. CIT (A) has erred in upholding the findings of the Ld. Assessing Officer who had erred in holding that the assessee is still in the process of setting up of business and therefore the business of the assessee has not "commenced" during the year. 3. Whether on the facts and circumstances of the case the Ld. CIT (A) has erred in confirming the disallowance of the claim of business loss made by the assessee in return of the income. 4. Whether on the facts and circumstances of the case the Ld. CITA (A) has erred in law and on facts in confirming the findings of the Ld. Assessing Officer who had erred in assessing the interest an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year under consideration, assessee has declared loss of Rs. 1,34,46,032/- in its ITR. On perusal of the computation of income and financials submitted by the assesee, which the AO has reproduced in para no. 2 of the assessment order and found that out of total revenue of Rs. 1,26,864/-, there is only Rs. 5,175/- revenue from operations and Rs. 1,21,659/- other income which comprises of income interest income and miscellaneous income during the whole financial year. From this income assessee has deducted total expense of Rs. 142,69,475/- in the P&L account and therefore net profit of (-) Rs. 1,41,42,611/- has been determined which has been subsequently arrived at loss of Rs. 1,34,46,031/- after giving effect under the provision of Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee. Accordingly, show cause notice dated 6.12.2018 was issued to the assessee asking therein as to why the expenses debited in the profit and loss account should not be disallowed being there was no business operations during the year under consideration. In response to the same, the assessee filed a reply dated 11.12.2018 alongwith documentary evidences. The explanation of the assessee was considered by the AO, but not accepted by holding that assesee has only shown single purchase and sale during the first quarter, thereafter no business transaction to generate revenue has been made in the whole financial year and disallowed the business loss claimed by the assessee during the year under consideration and also invoked the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as the case of the assessee. Therefore, he stated that this issue is squarely covered in favour of the assessee by the aforesaid decision of the ITAT, Delhi Bench ITO vs. Amrit Foods (P) Ltd.(Supra). 3.1 Ld. Counsel for the assessee further stated that assessee company was incorporated on 05.10.2011 under the Companies Act, 1956 with the name "Asset Infra Development Ltd.". Thereafter the name of the company was changed to IFFCO EBazar Ltd. by a Special Resolution passed in the Extra Ordinary Meeting (EGM) dated 25.3.2015 which was duly accepted by the Registrar of Companies. He further stated that in addition to the expense that had been incurred by the assessee in connection with setting up of the business, assessee also in the first o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the assessee may be dismissed. 5. I have heard both the parties and perused the relevant records especially the documentary evidences filed by the assessee alongwitth the decision of the ITAT, Delhi 'B' Bench in the csse of ITO vs. Amrit Foods (P) Ltd. (Supra), I am of the view that the assessee has commenced its business in the said assessment year as the assessee had made its sale and purchase i.e. Harpic which is evident from the table below which has already been mentioned in the written submissions:- S.No. Name of the party Name of good or service purchased Amount Purhcase/Sale 1. M/s Shyn Industries Harpic 5175 Purchase 2. M/s A&B Hosekeepers Pvt. Ltd. Harpic 5175 Sale Particulars FY 2015-16 FY 2016- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was available only in a vanaspati manufacturing unit and the assessee was not such a unit, (ii) that the plant purchased had no close link with the assessee's business which was manufacture and sale of desi ghee, (iii) that the interest paid by the assessee on fund borrowed for buying plant was not added to the cost of the plant but was claimed and allowed as revenue expenditure account of the assessee under appropriate heads, and (iv) that depreciation had not been allowed to the assessee in respect of the plant at any time. Since the margarine plant was a plant, the same had to be shown in the balance sheet as such under the head 'Plant and machinery'. There was no other way but to show it as such. It was wrong to infer from that, as don ..... X X X X Extracts X X X X X X X X Extracts X X X X
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