The Commissioner Of Income Tax – 6, Mumbai v. M/S.broad Band Solutions Private Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (L) NO.1023 OF 2011 The Commissioner of Income Tax – 6, Mumbai..Appellant. VersusM/s.Broad Band Solutions Private Limited..Respondent. Mr.Suresh Kumar with Ms.Suchitra Kamble for the appellant. CORAM : J.P. Devadhar &K.K. Tated, JJ. P.C. : DATE : 28[th] September 2011 1.Whether the Income Tax Appellate Tribunal was justified in holding that the assessee commenced its business on 1[st] March 2001 and consequently entitled to claim deduction of revenue expenses is the question raised in this appeal. 2.The assessment year involved herein is AY 2001-02. 3.In the assessment year in question, the assessee had filed its return of income declaring loss by debiting revenue expenses incurred after 1[st] March 2001 in its profit and loss account. The assessing officer was of the view that the assessee had not commenced its business operations during the previous year and, therefore, all expenses debited in the profit and loss account had to be treated as pre-operational expenses and were required to be capitalized. 4.On appeal filed by the assessee, the Commissioner of Income Tax (Appeals) confirmed the disallowance and held that the expenses incurred by the assessee were liable to be capitalized. 5. On further appeal filed by the assessee, the Income Tax Appellate Tribunal following the decision of this Court in the case of Commissioner of Income Tax V/s. Industrial Solvents & Chemicals Private Limited reported in 119 ITR 608 has held that since trial runs were carried out by the assessee from 1[st] March 2001, it must be held that the assessee has set up its business on 1[st] March 2001. The Income Tax Appellate Tribunal further recorded a finding that the documents filed on behalf of the assessee clearly establish that the business was in fact set up on 1[st] March 2001. 6.In these circumstances, the decision of the Income Tax Appellate Tribunal is based on finding of fact. No substantial question of law arises from the order of the Tribunal. The appeal is accordingly dismissed with no order as to costs. (K.K. Tated, J.)(J.P. Devadhar, J.)