What is the stage of "commencement of business"

This query is : Resolved

CA Archana Dhamecha (Querist)
Follow

08 June 2012 A Real estate company have purchased some land , over which it will construct the building & there after will sale that.

For this it has borrowed some fund & made some other expenditure like salary & office expenses

Company can amortise its preliminary Exp & Capitalise its interest cost if it have been incurred before commencement of business as per sec 35 of Income tax act

Now I want to know that mere purchasing of land will be suppose to commencement of business even if it had not sold any of its part.

CA Salman Mansoori

CA Salman Mansoori (Expert)
Follow

10 June 2012 The day the company recd the certificate of commencement of business. Its commencement starts irrespective of any transaction during the year. Thus purchase transaction is irrelevant for commencement of business and preliminary expenses