The assessing Officer disallowed expenditures on the ground that the assessee’s bio-mass power plant was synchronized to the grid only from 4-7-2011 and, since the assessee would not be ready to produce power till 4-7-2011, business would not be set up. Hence disallowed the expenditure. On appeal, the Assessee contended that its business was already set up but commencement did not take place due to the long gestation period. It had already acquired land to carry out business activities and the nature of major expenses incurred by the assessee was towards employee’s cost, misc. cost and depreciation which showed that assessee had hired staff to carry out its business activities. Assessee had obtained various approvals/permissions in hand, deployed technical personnel, placed purchase orders and also signed long-term power purchase agreements with clients, which were all integrated into the process of commencing business. Tribunal held that since the assessee had achieved the process of establishing business by acquiring necessary infrastructure and paying salaries and allowances to experts and had furnished documentary evidence showing that its business had already been set up in the relevant assessment year, business expenditure claimed was allowed as a deduction (AY. 2009-10, 2010-11)