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2013 (12) TMI 161 - AT - Income TaxExpenses u/s 37(1) - Held that:- The expenditure are in the nature of salary, electricity, audit fee etc. incurred for expansion of existing line of business that is setting up of more number of stores/speciality stores or for maintenance of already established stores - Operations of these stores at various locations is one composite business and once business had been started then the expenditure can not be linked only to the stores which became operational during the year under consideration. When the expenditure is incurred for the purpose of expansion of business which is already in existence and, which is in the nature of revenue, then the same is allowable as revenue expenditure irrespective of the treatment given by the assessee to such expenditure in its books of account - Following CIT vs. Kothari Auto Parts Manufacturers Pvt. Ltd. [1975 (12) TMI 28 - BOMBAY High Court] - These expenditures did not create any asset and also did not provide enduring benefit to the business of the assessee so as to say that the expenditure was capital in nature - Assessee has filed the details mentioning job description of each of the employees alongwith amount paid to him describing also that how much TDS has been deducted. Without pointing out any defect and without bringing any adverse material on record, Ld. CIT(A) has observed that assessee has failed to prove that the expenditure was made wholly and exclusively for the purpose of business of the assessee - The observation of CIT(A) cannot be upheld - The assessee itself has disallowed a sum of ₹ 51,23,957/- out of the aforementioned amount of ₹ 3,64,49,545/- under the provisions of section 40A(7)/40A(9)/43B of the Act - An amount of ₹ 3,13,25,588/- should be allowed to the assessee on account of revenue expenditure - Decided in favour of assessee.
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