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2021 (10) TMI 1319 - AT - Income TaxAssessment u/s 153C - whether assessment has not abated on the date of search and thus has attained finality? - HELD THAT:- The undisputed facts are that a search action under section 153A was conducted on the assessee on 11.03.2014 whereas the return was filed on 29.09.2011 meaning thereby that on the date of search, the assessment has already attained finality and thus has not abated on the date of search. Thus we observe that indisputably the assessment in the instant year has not abated on the date of search. Keeping in view the said facts and circumstances, we are of the considered view that addition to the income of the assessee can only be made on the basis of incriminating materials found during the course of search. In the present case, there is no such incriminating material and therefore, the AO has no jurisdiction to make addition in the unabated assessment. CIT(A) has passed a very reasoned order by following various decisions including that of CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015 (5) TMI 656 - BOMBAY HIGH COURT] wherein it was held that no addition can be made in respect of assessments which have become final if no incriminating material is found during search. - Decided in favour of assessee. Disallowance by rejecting the expenses claimed in the P&L account - HELD THAT:- We find that the issue of allowability of indirect expenses incurred by the assessee by way of administrative expenses, selling and marketing expenses have been decided by the lfd CIT(A) as discussed above by following the co-ordinate Bench of the Tribunal in M/s. Hiranandani Palace Garden Pvt. Ltd. [2015 (12) TMI 1649 - ITAT MUMBAI] Accordingly, since the assessee has incurred these expenses under the head administrative expenses, marketing and selling expenses, we are inclined to dismiss the ground raised by the Revenue by respectfully following the decision of the coordinate bench as discussed above. The ground no. 4 is dismissed. Addition on account of interest income on fixed deposits - HELD THAT:- We find that the issue has been decided by the coordinate Bench of the Tribunal in favour of the assessee in the case of sister concern case M/s. Hiranandani Palace Garden Pvt. Ltd. [2015 (12) TMI 1649 - ITAT MUMBAI] wherein it has been held that interest income from fixed deposits during the intervening period i.e their borrowing and deployment is assessable as business income and thus allowed the appeal of the assessee. Therefore, we do not find any infirmity in the order of Ld. CIT(A) and accordingly the same is upheld on this issue by dismissing the ground No.5 of the Revenue’s appeal. Addition of preliminary expenses incurred after the incorporation of the company - HELD THAT:- As decided in own case [2015 (10) TMI 2246 - ITAT MUMBAI] allowed the appeal of the assesse on this issue. Accordingly, we do not find any infirmity in the order of Ld. CIT(A) on this issue. However, as pointed out by the Ld. Counsel of the assessee that in the subsequent year the amount was higher, however, requested the Bench that the same amount of ₹ 14,87,380/- may kindly be allowed in this year also. Accordingly, we are inclined to direct the AO to allow an amount of ₹ 14,87,380/-. Consequently, the ground no. 6 is partly allowed.
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