The Tax Publishers2021 TaxPub(DT) 0315 (Del-Trib)

INCOME TAX ACT, 1961

Section 28 Section 2(13)

There may not be a series of transactions for both of purchase and sale to constitute trade and even a single transaction may constitute business as defined in section 2(13), assessee had commenced its business in the concerned assessment year, as assessee had made purchase and with the intention of reselling for profit and transaction in question was an adventure in the nature of trade and the loss arising therefrom was allowable as business loss.

Business loss - Allowability - AO taking note of single purchase and sale, held no business set up and commenced by assessee -

Assessee claimed business loss. AO disallowed deduction on the ground that assessee was only showed single purchase and sale during the first quarter, thereafter no business transaction to generate revenue was made in the whole financial year which provided that transaction was not related to business and nature of expense debited in the P&L Account also did not relate to business operations rather it was in the nature of carrying out research and analysis, feasibility for the business i.e. activity prior to setting up and commencement of business. Held: There may not be a series of transaction for both of purchase and sale to constitute trade and even a single transaction may constitute business as defined in section 2(13), assessee had commenced its business in the concerned assessment year, as assessee had made purchase and with the intention of reselling for profit and transaction in question was an adventure in the nature of trade and the loss arising therefrom was allowable as business loss.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2016-17



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