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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV & SHRI INTURI RAMA RAO
Date of hearing : 25.04.2018 Date of Pronouncement : 03.05.2018 O R D E R
Per Sunil Kumar Yadav, Judicial Member
This appeal is preferred by the revenue against the order of CIT(Appeals) inter alia on the following grounds:-
“1. The order of the CIT (Appeals) is opposed to law and the facts and circumstances of the case. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in considering on one hand that the assessee had only procured land during the relevant previous year and that no development activity had been carried out, and on the other hand directing that the pre-operative expenses be set off against the interest income. The finding of facts given by the CIT(A) are incorrect and contradictory. 3. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the CIT(A), in so far as it relates to the above grounds may be reversed and that of the Assessing Officer be restored. 4. The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of the appeal.”
During the course of hearing, the ld. Counsel for the assessee submitted that the impugned issue was examined by the CIT(Appeals) in the light of the order of the Tribunal in the case of UE Development India Pvt. Ltd. reported at (2013) 35 taxmann.com 67 (Bang. Trib.) in which it was held that in order to determine as to whether the assessee has commenced business for the purpose of allowing certain expenditure under the head ‘business expenditure’, it is not necessary that all activities which go to make up the business should have been started. Rather, it is sufficient that if one among the activities which constitute the business is commenced which is first in point of time and which must necessarily precede all the others. The CIT(Appeals) has also examined the issue in the light of judgment of jurisdictional High Court in the case of MFAR Construction Ltd. in of 2005 in which it was held that even when actual business activity had not commenced, expenditure incurred by assessee can be allowed as business expenditure. It was further contended on behalf of the assessee that CIT(Appeals) has examined the issue in the light of the order of the Tribunal and the judgment of jurisdictional High Court, therefore no interference is called for.
The ld. DR, however, relied upon the order of the AO.
Having carefully examined the order of the CIT(Appeals) in the light of rival submissions, we find that the CIT(Appeals) has decided the issue following the order of the Tribunal in the case of UE Development India Pvt. Ltd. (supra) and the judgment of the jurisdictional High Court (supra). The view taken by the Tribunal has not been over-ruled so far, therefore it holds the field. In the light of these facts, we are of the view that since the CIT(Appeals) has decided the issue following the order of the Tribunal and the judgment of the jurisdictional High Court, no interference is called for in the order of the CIT(Appeals). Accordingly, we confirm his order.
In the result, the appeal of the revenue stands dismissed.