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2019 (12) TMI 1306 - AT - Income TaxIFRS audit fees - disallowance on the ground it pertains to the period prior to the year under consideration - HELD THAT:- We find that though the audit pertains for the year ended 31/12/2007, the invoice was raised by the concerned Auditor only on 28/11/2008 as the service was rendered thereon during the year under consideration. We find that the services have been crystalised during the year under consideration and accordingly become an expenditure allowable as deduction for the year under consideration. It is not the case of the revenue that assessee had indeed claimed deduction for the very same sum in the earlier year on mercantile basis. We hold that the assessee is indeed entitled for deduction towards IFRS audit fees. - Decided in favour of assessee Deduction towards service tax credit written of - addition on the basis that it pertains to earlier period - HELD THAT:- It is not in dispute that this service tax receivable emanates out of the input services used for the purpose of business of the assessee. Once, the service tax input credit is not eligible to be utilised against the output tax, the same requires to be written off as business expenditure, which is what is done by the assessee in the instant case. There is no dispute that the service tax input credit was not eligible to be utilised towards output service tax by the assessee. In these circumstances, the action of the assessee in writing off the input service tax credit lying in current assets loans and advances as on 01/04/2009 and consequentially claiming the same as deduction, is in accordance with law.- Decided in favour of assessee. Adhoc disallowance of 30% of total travelling and conveyance expenses - HELD THAT:- These details were subject to verification by the ld. AO in the remand proceedings and in the remand report, the ld. AO had held that some of the expenses are not fully verifiable. We find in these circumstances, some adhoc disallowance of expenses need to be made. Disallowance @30% would be on the higher side given the status of the company and the behaviour of the assessee. Hence, we hold that disallowance on an adhoc basis at 10% of total travelling and conveyance expenses would meet the ends of justice in the peculiar facts and circumstances of the instant case. Accordingly, the ground No.3 raised by the assessee is partly allowed.
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