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2011 (10) TMI 492 - AT - Income TaxExcise duty paid under KVSS scheme on suppressed sales of earlier A.Ys - assessee claiming it u/s 43B - Additions to Income were made by applying G.P. rate declared by assessee on such sales - Such additions were later on deleted on technical grounds - Held that:- Sec.43B puts a rider that an expenditure which is otherwise allowable under the other provisions of the Act can be allowed in the year of actual payment of such expenditure. To be a permissible deduction , there must be a direct and intimate connection between the expenditure and the business. In this case, assessee was doing the business of selling of tobacco products but some part of the business has been kept outside the books and, therefore, the expenditure incurred on the activity which is outside the books cannot be said to be directly and intimately related to such business. Moreover, when an addition is made on the basis of GP, then (following the Matching concept) obviously all expenses in relation to such sale receipts are deemed to have been allowed - against the assessee.
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