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TMI Blog2016 (7) TMI 1490X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, salary of one Accountant and one office boy can hardly be said to be an expenditure which was not incurred wholly and exclusively for the business of the assessee. A temporary lull at a point of time in the business of the assessee in the absence of any fact or evidence to the contrary cannot lead to the conclusion in the peculiar facts and circumstances of the case that the business has permanently closed especially in view of the fact that as per the assertions of the assessee before the Assessing Officer that its licenses etc are being maintained and kept intact ensuring that the hotel is ready for operation. A fact which has not been disputed as license fees have been allowed by the AO himself. - Decided in favour of assessee. - I.T.A. No.-1080/Del/2014 - - - Dated:- 29-7-2016 - SMT DIVA SINGH, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER For the Appellant : Sh. Manoj Kr. Chopra, Sr.DR For the Respondent : Sh. Ajay Wadhwa, Adv. ORDER PER DIVA SINGH, JM The present appeal has been filed by the revenue assailing the correctness of the order dated 19.12.2013 of CIT(A)-1, New Delhi pertaining to 2008 09 assessment year on the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the expenses claimed were filed by way of a chart vide letter dated 15.11.2010:- 1. The assessee company during the year under assessment', in the computation of income has claimed deduction of expenses detailed as under-debited to Capital Work In Progress in the Balance Sheet:- S.No. Particulars Amount (Rs.) 1. Water Expenses 1,02,822/- 2. Security Charges 13,89,560/- 3. Government Dues (a) Duties Taxes 14,500/- (b) Insurance of Assets 36,724/- (c) License Fees 445,790/- (d) MVAT 560,833/- 4. Salary-Accountant Ranjeet 641,433/- 5. Office Boy 64,000/- 6. Electricity Expenses 31,34,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 600/- Rest of other expenses claimed by the assessee company, are disallowed. 3.1. As a result of this reasoning, the following expenses were allowed and addition of ₹ 53,31,894/- was made by way of a disallowance treating these as work in progress:- S.No. Particulars Amount(Rs.) 3. Government Dues (a) Duties Taxes 14,500/- (b) Insurance of Assets 36,724/- (c) License Fees 4,45,790/- (d) MVAT 5,60,833/- Total Rs.10,57,847/- 4. The assessee carried the issue in appeal before the CIT(A). Relying on Shingar Lamps Ltd. vs ACIT [2006] 150 taxman 17 (ASR) (MAG); K.N.P. Securities P. Ltd. [2010] 1 ITR 130 (Mum); CIT vs Anita Jain [2009] 182 taxman 173 (Delhi); Urban Mass Transit Co.Ltd. vs ACIT [2013] 39 taxmann.com 121 (Del.); CIT vs Ramput Timber Company Ltd. 129 ITR 58 (All.); N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be capitalized as these expenses do not add any value to the capital asset. Moreover, the loss returned by the appellant was reduced from ₹ 8,60,18,830/- filed in the original return to ₹ 1,09,60,211/- in the revised return and as such the claim of the expenses made by the appellant has not increased the loss returned. In these facts and circumstances of the case, the expenses claimed by the appellant are allowed. The disallowance of ₹ 53,31,894/- made by the revenue is deleted. 5. Aggrieved by this, the Revenue is appeal before the ITAT. 6. The Ld. Sr.DR relies upon the assessment order and submits that the CIT(A) has come to a finding without addressing what has happened in 2005-06 AY. Reference to which has specifically been made by the AO. Reliance was also placed upon CIT vs PIEM Hotel Pvt. Ltd. 209 ITR 616 (Bom.). 7. The Ld.AR on the other hand filed detailed written submissions in support of its claim. Referring to the same it was his submission that there is no doubt that Hotel Sea Rock was owned by the assessee, and it was under extensive renovation during the year under consideration. It was his submission that its operations were temporari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed that it has maintained all necessary licenses etc. required for the operation of a hotel. We pause here and find on going through the material available on record and considering the arguments of the Ld. Sr. DR. that nothing has been brought on record by the Revenue to show that the facts as narrated by the assessee before the Assessing Officer and not disputed by the Revenue are no longer true or have all along been an incorrect assertion of facts. We further find that referring to the details of the expenditure which have been extracted in the earlier part of this order the assessee has submitted that the expenses were bonafide and were necessary government dues which statutorily are required to be paid and have been necessarily incurred for keeping its business alive. We fail to comprehend the relevance of the facts reference to which has been made by the AO namely in the proceedings under section 153A read with section 143(3) in 2005-06 AY. The Revenue has submitted that business still has not commenced even today an argument unsupported by any fact. The ld.AR also responded again without any evidence that the assessee was on the look out for a partner and/or for a take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts available and the issue under consideration by the Court it is seen that it has no bearing on the facts of the present case. 8.2. Accordingly considering the judicial precedents relied upon and the facts and circumstances of the case, we find that the decision arrived at in the peculiar facts and circumstances of the case fully supports the impugned order. A temporary lull at a point of time in the business of the assessee in the absence of any fact or evidence to the contrary cannot lead to the conclusion in the peculiar facts and circumstances of the case that the business has permanently closed especially in view of the fact that as per the assertions of the assessee before the Assessing Officer that its licenses etc are being maintained and kept intact ensuring that the hotel is ready for operation. A fact which has not been disputed as license fees have been allowed by the AO himself. 9. Accordingly, in view of the detailed decision as elaborated above, we find no good reason to interfere with a finding arrived at by the CIT(A). Accordingly dismissing the departmental appeal the impugned order is upheld. 10. In the result, the appeal of the Revenue is dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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