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2017 (5) TMI 1713 - AT - Income TaxDisallowance of administrative expenses on ad hoc basis - HELD THAT:- AO observed that evidence which was produced in support of Administrative and other Expenses were defective in one way or other. Admittedly, the disallowance is made on adhoc basis, no specific defect or shortcoming is pointed out by the authorities below. Therefore, under the facts of the present case, we hereby direct the Assessing Officer to delete the disallowance made on account of Administrative Expenses. This ground of the Assessee’s appeal is allowed. Disallowance of electricity expenses by invoking of provision of section 40A(3) - HELD THAT:- We are unable to accept the contention of the Ld. Counsel for the assessee, as provisions are quite clear the decision have been rendered under the belief that if any Government Company qualifies to be state in term of Article 12 would be entitled for exemption under Rule 6DD(b). The terms state cannot be construed as Government as given in the aforesaid provision. The terms state, is used for a public purpose but for the purpose of interpretation of rules 6DD(b), this cannot be taken as if all the Government’s companies are exempt merely because they qualified to be termed as state under Article 12 of the Constitution of India. Had the intention of the legislation was to exempt other Government Companies as well as same would have been mentioned in the provision of rule 6DD(b) as has been specifically mentioned in clause (a) of Rule 6DD in respect of Reserve Bank of India, Banking Company., State Bank of India or any Subsidiary Banking any Cooperative Bank, Land mortgaged Bank any Primary Agricultural Credit Society, any Primary Credits society, Life Insurance Corporation of India. Clause (b) of Rule 6DD cannot be stretched to the extent of bringing every Government entity/company into the fold of exempt category. Therefore, had the intention of the legislation was to exempt the Government electricity company, it would have been mentioned in the Clause (b) of Rule 6DD. Therefore, this Ground of the assessee’s appeal is dismissed.
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