AXIS SALES LTD ( NOW KNOWN AS AXIS SECURITIES AND SALE LTD),MUMBAI vs. DCIT CIR 3(1), MUMBAI

आदेश / O R D E R Per Joginder Singh (Judicial Member) The assessee as well as Revenue is in cross appeal against the impugned order dated 12/06/2012 of the ld. First Appellate Authority, Mumbai. First, we shall take up appeal of the Revenue (ITA No.5190/Mum/2012).

3.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee company is subsidiary of Axis Bank Ltd. was incorporated on 06/12/2005. As per the assessee, the MD was appointed on 05/04/2006 and the certificate of commencement was received on 02/05/2006. The employees were hired by the assessee at later date. The claim of the assessee is that infrastructure was put to use as on the date of appointment of MD on 05/04/2006. However, the Ld. Assessing Officer was of the view that the business was set up on August 2006, therefore, the expenses of Rs.11,06,681/-, claimed as deduction for the period upto July 2006 is to be disallowed. The Commissioner of Income Tax (Appeal) affirmed the stand of the ld. Assessing Officer. Considering the totality of facts and the circumstances narrated before us, in principle, we affirm the stand of the Commissioner of Income Tax (Appeal).

3.2. However, so far as, the alternative claims of the assessee that the deduction u/s 35D in respect of expenditure treated as preoperative expenses should have been allowed, is concerned, we find merit in the alternative claim of the assessee. Section 35D speaks about amortization of certain preliminary expenses, where the assessee incurs any expenditure specified in sub-section (2) before the commencement of his business or after the commencement of his business (in connection with the extension or with setting up a new unit). The assessee is directed to file the necessary evidence before the Assessing Officer for its claim and the ld. Assessing Officer is directed to examine the claim of the assessee and decide/allow in accordance with law, thus, the alternate claim of the assessee is sent to the file of the Assessing Officer.

Finally, the appeal of the Revenue is dismissed as not maintainable, whereas, the appeal of the assessee is partly allowed for statistical purposes.

This order was pronounced in the open in the presence of ld. representatives from both sides at the conclusion of the hearing on 07/04/2016.

Sd/- Sd/- (Rajendra) (Joginder Singh) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 07/04/2016 f{x~{tÜ? P.S/.�न.स. आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :