CIT v. Saurashtra Cement and Chemical Industries Ltd.

DCIT, New Delhi vs. M/S. Jubilant Offshore Drilling Pvt. Ltd., Noida

In the result, the appeal of the department is dismissed

Bench: Sh. N. K. Saini, Am Ita No. 5660/Del/2014 : Asstt. Year : 2010-11 Dcit, Circle-4(1), Vs M/S Jubilant Offshore Pvt. Ltd., New Delhi A-80, Sector-2, New Delhi (Appellant) (Respondent) Pan No. Aabcj3999H Assessee By : Sh. Rohit Garg & Smt. Tejasvi Jain, Cas Revenue By : Sh. Ved Prakash Mishra, Sr. Dr Date Of Hearing : 24.09.2015 Date Of Pronouncement : 30.09.2015 Order This Is An Appeal By The Department Against The Order Dated 11.07.2014 Of Ld. Cit(A)-Viii, New Delhi.

…. The business would commence when the activity which is first in point of time and which must necessarily precedes the other activities is started as held by Hon'ble Justice P. N. Bhagwati in the case of CIT Vs. Saurashtra Cement and Chemical Industries Ltd. 91 ITR 170 (Gujarat High Court). The said decision of the Hon'ble Gujarat High Court was also affirmed by the Apex Court in the case of CIT Vs. Sarabhai Management Corporation Ltd. (1992) 102 CTR (SC) 164 and the said decision has recently been followed by the Jurisdictional High court in the case of the CIT Vs. Aspentech India (P) Ltd. 187 Taxmann 25 (Delhi…

M/S. Matrix Infrastructure, New Delhi vs. ITO, New Delhi

In the result the appeal of the assessee is partly allowed and the appeal of the revenue is dismissed

Bench: Sh. A. T. Varkey, Jm & Sh. O.P.Kant, Am

…ble deductions because those expenses would be incurred at a point of time when the previous years of the business would not have commenced 9.2 Further, the Hon’ble Gujarat High Court in the case of CIT Vs. Saurastra Cement and Chemical Industries Ltd. (1973) 91 ITR 170 has made following observation on the question of setting up of business: “… A business activity consists of three stages: the first stage relates to the activity necessary for the purpose of acquiring the raw material and establishment of plant and machinery and the second activity comprises the processing and manufacturing by using the raw mater…

Commissioner of Income Tax vs. Jubilant Offshore Drilling Pvt Ltd

The appeal is dismissed in limine

…activity in the course of carrying on the business is started, the business must be said to have commenced, yet the Assessing Officer failed to apply the said ratio. The Gujarat High Court in CIT versus Saurashtra Cement and Chemicals Industries Ltd [1973] 91 ITR 170 (Guj.) held, “... business is nothing more than a continuous course of activities and all the activities which go on to make up the business need not be started simultaneously in order that the business may commence. The business would commence when the activity which is first in point of time and which must necessarily precede the other…

Carefour Wc&C India Private Limited vs. Deputy Commissioner of Income Tax

…Page 7 of 23 established and is ready to commence business, it can be said of that business that is set up. But before, it is ready to commence business, it is not set up. Further in the case of CIT vs Saurashtra Cement and Chemical Industries Ltd. (91 ITR 170) it was held that the word “set up” is equivalent to the word “establishment”, but operation for establishment cannot be equated with the establishment of the unit itself or its setting up. In another case namely, CWT vs Ramraju Surgical Cotton Mills Ltd. (63 ITR 478) it was held that a unit cannot be said to have been set up unless it is re…

Omniglobe Information Tech India Pvt Ltd

…nced, the business had been setup and the subsequent rendering of service to third parties would be at a later date when the actual services were rendered to the parent/holding company. In CIT Vs. Saurashtra Cement and Chemical Industries Limited, (1973) 91 ITR 170 (Guj.), 2014:DHC:3835-DB ITA 257/2012 Page 16 of 18 the assessee had obtained mining lease for quarrying limestone and had started mining operation, but installation of the plant and machinery for manufacture and sale of cement was directed to be capitalised. Looking into the business of th…

Commissioner of Income Tax vs. Samsung India Electronics Ltd

The appeal is dismissed

…orded that the respondent-assessee had commenced its business during the previous year in 1995-96 and training was given in March, 1997. 4. Pertinent observations have been made in Commissioner of Income Tax v. Cement and Chemical Industries Ltd. [1973] 91 ITR 170 by a division bench of Gujarat High Court (authored by Justice Bhagwati P.N. J as his Lordship then was) that “business” connotes a continuous course of activities and all the activities need not start simultaneously in order that the business may commence. The business would commence with the activity which is first in point of time and whic…

Commissioner of Income Tax vs. Aspentech India P. Ltd

…undertaken as part of business activity and the expenses incurred are to be allowed as business expenses, the CIT (A) referred to and relied upon the judgment of the Gujarat High Court in the case of CIT v. Saurashtra Cement & Chemical Industries Ltd. (1973) 91 ITR 170 and that of the Calcutta High Court in Tetron Commercial Ltd. v. CIT, 261 ITR 422. Referring to Saurashtra Cement & Chemical Industries Ltd. (supra), the CIT(A) stated that following tests were laid down by the Gujarat High Court in that case to determine the commencement of business activities. It reads TO as under :- "A business activity cons…