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2014 (1) TMI 593 - AT - Income TaxAllowability of expense - Commencement of business - Addition of Additional Evidences under Rule 29 of Income-tax (Appellate Tribunal) Rules Held that:- Additional evidences are admitted relying on Commissioner Of Income-Tax Versus Kum. Satya Setia [1982 (4) TMI 22 - MADHYA PRADESH High Court]. The assessee's business commenced from 1994-95 itself which was followed by a lull in the intervening periods. This does not mean cessation of the assessee's business, in view of the above facts. In any case, looking from any angle, it has to be held that the assessee's business of consultancy was set up in this year as substantial revenue is earned in the next 2 years. Therefore, we are inclined to allow the claim of the assessee by holding that the assessee's business was commenced and alternatively relying on the setting up of business as held in the cases of Hughes Escorts Communications Ltd. [2007 (9) TMI 261 - DELHI HIGH COURT] and Whirlpool of India Ltd. [2009 (8) TMI 28 - DELHI HIGH COURT]. Allowability of Expenditure Amount of Returns allowed as business expenditure or not Held that:- Not returning the amount to the Government would have cost the assessee its business prospectus and its title over the business by way of withdrawing the joint venture, etc. - the assessee in order to protect its business interest and business propriety refunded the amount which can be termed as compensation, return ; interest or by whatever name - Its accrual, crystallisation and finalisation is relatable to this year - the amount of return is allowable to the assessee in this year as business expenditure - the assessee's business has already commenced the entire amount paid to M/s. Wilbur Smith Associates is to be allowed to the assessee being professional fee for consultancy services Decided in favour of Assessee.
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