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| The Tax Publishers2020 TaxPub(DT) 1061 (Mum-Trib) INCOME TAX ACT, 1961
Section 28
Undisputedly assessee had duly set up business after necessary regulatory approval received from RBI. The assessee was inter alia also engaged in providing credit risk information. Accordingly, when business had been set up and operation duly commenced after due approval of RBI, AO could not deny aspect of commencement of business only on the ground that income from credit report is not shown. There is no law that in business duly incurred business expenditure cannot be allowed if little income has been earned. Accordingly, disallowance of business loss was not justified.
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Business loss - Allowability - AO alleging non-commencement of business on the ground of no income from any credit report shown by assessee -
Assessee claimed deduction of business loss AO denied assessee's claim holding that since assessee had not been able to submit credit report to any customer during the period and had not shown any income therefrom it could not be said that assessee had commenced business. Held : Undisputedly, assessee had duly set up business after necessary regulatory approval received from RBI. The assessee was inter alia also engaged in providing credit risk information. Accordingly, when business had been set up and operation duly commenced after due approval of RBI, AO could not deny aspect of commencement of business only on the ground that income from credit report is not shown. There is no law that in business duly incurred business expenditure cannot be allowed if little income has been earned. Accordingly, disallowance of business loss was not justified.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12 to 2012-13
INCOME TAX ACT, 1961
Section 40A(2)(b)
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