The case involves the disallowance of expenditure incurred ...

Business setup date is crucial for expense deduction. Actual income generation not necessary for expenditure allowance.

Case Laws Income Tax

June 14, 2024

The case involves the disallowance of expenditure incurred during business setup. The Appellate Tribunal clarified that setup of business is distinct from commencement of business. Expenses post-setup are allowable even if no revenue is generated. The gestation period for business like the assessee's is long. The Tribunal held that actual business income generation is not essential for claiming business expenditure, focusing on whether the business is set-up. The Tribunal allowed revenue expenditure claimed post-setup date. Depreciation was allowed based on setup date. Disallowance of bonus under u/s 43B/36 was overturned as bonus is part of CTC and not profits. Addition on Short-Term Capital Gains was upheld as gains were offered under 'income from other sources' not as capital gains.

View Source

← Previous Next →

The case involves the disallowance of expenditure incurred ...

Business setup date is crucial for expense deduction. Actual income generation not necessary for expenditure allowance.

Case Laws Income Tax

June 14, 2024

You may also like:

Rectification u/s 154 - Deduction claimed u/s. 80IAB - Wrong classification of income under the head ‘income from house property’, has resulted in wrong claim of...

Allowance of standard deduction u/s 24(a), deduction for actual repairs, and deduction of accumulated income u/s 11(2) in the case of a charitable trust claiming...

Assessee voluntarily declared income under "income from other sources" in return. AO disallowed deduction claimed for coordination and settlement expenses due to lack of...

The assessee, engaged in the business of shares and securities, claimed administration expenses, including Portfolio Management Service (PMS) expenses, against capital...

Various issues related to allowability of expenses, deductions, transfer pricing adjustments, and other income tax matters for a pharmaceutical company. Key points are:...

Entitled to deduction u/s 80IA (4)(iii) on rental income - where the main business of the company is to earn rental income as its business income, the income would be...

Treating additional income earned on sale of shops as income u/s.69A - whether undisclosed income is “business income” or “income from other sources” - As per the...

Deduction u/s 80IA - profit of Generation of electricity - notional income from savings in Low Sulphur Heavy Stock (LSHS) due to steam generation by the assessee's...

The assessee claimed deduction of brokerage expenses u/s 57(iii) against income from other sources. The Assessing Officer disallowed part of the expenses in proportion...

Disallowance of expenditure claimed under the head "Business" - proof of commencement of business - the generation of actual business income was not an essential element...

Rental income correctly classified as "income from house property" rather than "income from business" despite composite rent including amenities charges. TDS deducted...

Characterization of receipts - Treatment of interest income from staff loans and advances, interest income from other loans and advances and miscellaneous income -...

Allowable business expenses - There is difference between commencement of the business and setting off of the business. All the expenses incurred pre-commencement are to...

Denial of claim of loss or to categorize certain expenses as pre-operative expenses - commencement of business during the year - assessee’s business was ‘set up’ or not...

Claim of expenses from rental income - correct head of income - the business centre was being exploited by the respondent/assessee as a commercial asset. Therefore, the...

Quick Updates: