TMI Blog2020 (12) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... incriminating material, the unabated assessments could not be disturbed. Similar is the view of Hon ble Delhi High Court in CIT V/s Kabul Chawla[ 2015 (9) TMI 80 - DELHI HIGH COURT] . Thus we are inclined to setaside the additions so made in the hands of the assessee in the assessment order. The ground thus raised stand allowed. Disallowance of business expenditure - business had not been commenced - HELD THAT:- Upon due consideration, we find that the premises was taken on lease since 2006 and the business could not be commenced by the assessee till AY 2014-15 which would substantiate the fact that there was not any temporary dormancy or lull period for the business. No fresh material has been placed before us to disturb these findings rendered by learned first appellate authority. However, in our considered opinion, the expenditure which was quite necessary to maintain assessee s corporate personality would be an allowable expenditure since without incurring the same, the assessee could not have remained into existence. Therefore, we direct Ld. AO to identify such expenditure and allow the same to that extent. The assessee is directed to furnish the requisite details, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of business expenses of Rs.8,42,298/- by observing that no business is commenced during the year. 3.1 The learned CIT(A) failed to appreciate that assessee is not the owner of the immovable property and also failed to appreciate that the existing/old hotel taken by the assessee on lease was for running hotel business after repairing/renovating the same hence, appellant had duly commenced the its business therefore, all the repairing expenses and other expenses incurred to maintain corporate status are allowable as business expenses. 3.2 The learned CIT(A) erred in observing that expenses incurred by the Appellant are prior period expenses hence same not allowable as business expenses. 3.3 The Learned CIT(A) fail to appreciate that the Learned AO duly accepted the interest income as business income, hence expenses claimed are deductible. 3.4 Assessee submit that the Learned CIT(A) fail to appreciate that expenses incurred for business purpose cannot be denied merely because the business is temporarily abandoned during the year due to litigation with lessor/owner of the property. 4. In the facts circumstance of case and in law, the Ld.AO failed to allow set-off of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly the assessment was framed after disallowing the balance expenditure. 3.1 Before Ld. CIT(A), the assessee took a stand that assessment was bad in law since the additions were not based on any incriminating material unearthed during the course of search proceedings. Reliance was placed, inter-alia, on the decision of Hon ble Bombay High Court in CIT V/s Continental Warehousing Corporation (Nhava Sheva) Ltd. 2015 374 ITR 645 as well as Gurinder Singh Bawa 2016 386 ITR 418 and the decision of Hon ble Delhi High Court in CIT V/s Kabul Chawla 61 Taxmann.com 412. The Ld. CIT(A), noticing the provisions of Sec.153A, opined that Ld.AO was duty bound to assess or reassess the total income of 6 assessment years. The total income will cover not only the income emanating from declared sources but from all sources including undisclosed ones. For the same, analogy was drawn from decision of Hon ble Rajasthan High Court in Jai Steel V/s ACIT 2013 259 CTR 281 which held that the word assess has been used in the context of abated proceedings and the word reassess has been used in the context of completed assessment proceedings. It was also noted that the revenue was under cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six A.Ys immediately preceding the previous year relevant to the A Y in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The A.O. will exercise normal assessment powers in respect of the six years previous to the relevant A.Y. in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs. ''in which both the disclosed and the undisclosed income would be brought to tax . iv. Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for assessee to seek deduction or claim expenditure in assessment u/s 153A which has not been claimed in original assessment, which assessment already stands completed. The same are not the facts or issues here. 5. Respectfully following above decisions, we are inclined to setaside the additions so made in the hands of the assessee in the assessment order. The ground thus raised stand allowed. Since we have allowed this legal ground and deleted the quantum additions in toto, the remaining grounds raised before us have been rendered merely academic in nature and therefore, not dealt with. 6. Resultantly, the appeal stands partly allowed in terms of our above order. ITA Nos.489 to 93/Jodh/2017, AYs: 2009-10 to 2013-14 7. Facts are similar in all these years. The assessment has been framed u/s 153A r.w.s. 143(3) wherein the business expenditure as claimed by the assessee has been disallowed. The appellate orders are, more or less, on similar lines. Facts being pari-materia the same, our adjudication as for AY 2008-09 shall mutatis mutandis apply to all these years. The assessee succeeds on legal grounds and all these appeals stands partly allowed. ITA Nos.494/Jodh ..... 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