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Section 3 of the Income-tax Act, 1961 - Previous year - Assessment year 1996-97 - Assessee-company having set up its business on 21-2-1997 claimed deduction on expenses incurred on travelling and conveyance, rent, etc. - Assessing Officer, however, disallowed same on ground that it had not commenced its business during assessment year in question - On appeal, Commissioner (Appeals), set aside order of Assessing Officer and held that (a) there is a distinction between commencement of business and setting up of business and the two dates need not necessarily overlap and (b) section 3 refers to date of setting up of business and as such it is only thereafter, that previous year of newly set up business would commence and, therefore, expenses incurred prior thereto could be taken into account for purpose of determining profits of a newly set up business - On further appeal, Tribunal confirmed said order - Whether orders of appellate authorities suffered from infirmity - Held, no Ms. Prem Lata Bansal for the Appellant. JUDGMENT Madan B. Lokur, J. - The Revenue has preferred this appeal under section 260A of the Income-tax Act, 1961 against the order dated 22nd June, 2004 passed by the Income Tax Appellate Tribunal, Delhi Bench, SMC-I (for short the Tribunal) in ITA 529/Del./2001. 2. The only issue that has been raised is with regard to deduction for expenses claimed by the assessee which was disallowed by the Assessing Officer on the ground that the assessee had not commenced its business during the assessment year. The claim of the assessee pertains to expenses incurred on travelling and conveyance, rent, telephone expenses, brokerage, maintenance and sales promotion. 3. The Assessing Officer was of the view that the business of the assessee would commence with the first purchase of stock in trade and since no trading activities had taken place, the assessee could not request for capitalization of the expenses incurred. 4. On appeal, the Commissioner of Income-tax (Appeals) [hereinafter referred to as CIT(A)] set aside the view of the Assessing Officer. The CIT(A) noted that there was a distinction between commencement of business and setting up of business and the…

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