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TMI Blog1981 (8) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... as confirmed the ITO's order. The income which is regarded as income from other sources was interest on a loan given by the company to one of the Directors on an equitable mortgage. Preliminary expenses amounting to Rs. 795 had not been allowed on the ground that the assessee had not commenced business on the date on which the loan was given. 2. Before us, the ld. counsel on behalf of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTR (Guj) 324 : (1977) 108 ITR 654 (Guj). However, none of these decisions support his contention as we shall presently see. In this case, even if money lending or depositing of money was one of the objects of the company, it was incidental or ancillary to the attainment of the main object of the company. It is important to bear in mind that even if the object carried out can come within the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company which is mentioned in the list of main objects. The money was lent only because it was considered in the interest of the company to do so until the manufacturing business was started, thus separating the actual lending from the main objects. That being so, it cannot be said that the company had started business when lending money. 3. It is true that in the third case mentioned ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held that there may be an interval between the setting up of business and commencing of the business and all expenses incurred during that interval would be a permissible deduction. In that case, the assessee was held to have commenced its business activity before the expenses in question were incurred. These decisions have no bearing on the present case because as stated above the actual act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only from that date. The cases cited above are those relating to companies formed before that date and, therefore, the proposition laid down in Prem Conductors that company can commence business in any one of the categories mentioned in the object clause must be read to mean that the company can do so only by doing business in any one of the activities mentioned in the main object clause. 5. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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