Disallowance of Expenses: Consideration of Business Commencement – Case Analysis

ACIT Vs Capricorn Identity Services P Ltd (ITAT Delhi) This case analysis focuses on the disallowance of expenses by the Assessing Officer on the grounds that the business had not commenced, rendering the expenses non-allowable as revenue. The ld. CIT(A) (Commissioner of Income Tax – Appeals), after considering the audited accounts and relevant documents of the assessee, found that the delay in sales was due to the non-receipt of administrative approval, despite the purchases being made and necessary preparations being completed. The analysis examines how the Hon’ble jurisdictional...