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2017 (3) TMI 85 - ITAT MUMBAIPayment to various clients in Valsad region on account of is regularities committed by one of its sub brokers - allowable business expenditure - Held that:- We find that the assessee had claimed that the payment was made to the clients for preserving its goodwill and reputation. It is a fact that expenditure in question was not incurred for fostering the business of another person. It was also not gratuitous or for some improper or oblique purpose outside the course of the business. Preserving business reputation by an assessee is allowable expenditure under the head commercial expediency. Old business wisdom states that even at the cost of lakhs credit/ reputation/goodwill should be preserved(Jaaye laakh, rahe Saakh). In short, expenditure incurred by the assessee even voluntary and without any legal obligation has to be allowed as it was incurred for preserving the reputation of its business. Alternatively, it is allowable as business loss also. Considering the peculiar facts and circumstances of the case, we are unable to endorse the order of the FAA. We decide ground of appeal in favour of the assessee.
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