Category Archives: Readiness to Commence Business- Blatant Misapplication of law

Readiness to Commence Business- Blatant Misapplication of law- NSE/BSE Member Case

The facts along with the assessee’s plea

In GNG Stock Holdings (P) Limited v. DCIT (2011) 12taxmann.com 376 the assessee private limited company was incorporated on 6-9-2004 to act as member broker in NSE and BSE. The assessee filed application for trading and clearing membership of the National Stock Exchange on 12.10.2004 and also given security deposit and collateral security to NSE along with requisite fees. The assessee claimed that the business activities had commenced during the year under consideration and further the assessee company had been set up on 6-9-2004 itself.

AOs Dictate

Assessing Officer held that the business expenses can be allowed only if any business activity is carried out by the assessee and