DCIT, CIRCLE-2(1), HYDERABAD, HYDERABAD vs. KARVY GLOBAL SERVICES LIMITED, HYDERABAD, HYDERABAD

ITA 745/HYD/2017Status: DisposedITAT Hyderabad08 June 2018AY 2006-076 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the business was 'set up' as per Section 3 of the Income Tax Act, which is sufficient for claiming expenditure, even if commercial operations had not fully commenced. The assessee had also generated some revenue.

What were the facts?

The assessee claimed business losses for AYs 2006-07 and 2007-08. The Assessing Officer disallowed these losses, contending that the business had not commenced operations and the expenses were pre-operative.

What were the issues?

Whether expenditure incurred before the commencement of commercial operations is allowable as a business loss if the business is considered 'set up'.

Which sections of the Income-tax Act were involved?

Section 3

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Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI B. RAMAKOTAIAH

PER B. RAMAKOTAIAH, A.M. :

These are Revenue appeals against the orders of the Commissioner of Income Tax (Appeals)-2, Hyderabad, dated 29-06-2016 & 25-01-2017 for the AYs. 2007-08 and 2006-07 respectively on the issue whether assessee’s claim of loss in the impugned years is allowable, as Revenue contends that the business has not commenced.

2.

Briefly stated, assessee-company filed its return of income for the AY.2007-08 declaring loss of Rs. 8,42,21,637/-. The assessment was reopened u/s. 147 of the Income Tax Act [Act] on the reason that assessee has not commenced

:- 2 -: M/s. Karvy Global Services Limited

commercial operations during the year under consideration and

The order continues below.

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