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2016 (1) TMI 1488 - AT - Income TaxDisallowance of 50% of Misc. Expenses including poojan expenses - HELD THAT:- We find merit in the contentions of assessee, these expenditure being in the field of customary expenses, labour welfare having been allowed in past year should be allowed. Our view is fortified by Honble Delhi High Court and Madras High Court judgments in the cases of Mohan Meakin Ltd [2009 (10) TMI 894 - DELHI HIGH COURT] and Aruna Sugars [1977 (1) TMI 8 - MADRAS HIGH COURT] Disallowance of compensation paid to taparies for vacating the unauthorized construction / kacchi taparies - HELD THAT:- Expenditure on compensation and payment to facilitators for removal of encroachment to ensure smooth mining activities related to business of the assessee are to be held as allowable expenditure. Our view is fortified by Hon’ble Supreme Court judgments in the case of Dalmia Jain and Co. [1971 (7) TMI 2 - SUPREME COURT] and Empire Jute Co [1980 (5) TMI 1 - SUPREME COURT] and other judgments. This ground of the assessee is allowed. Disallowance of membership fee paid to rotary club on behalf of director - HELD THAT:- Apropos meager amount incurred on club membership fee is allowable in view of various ITAT judgments including Sony India [2005 (5) TMI 557 - ITAT DELHI]. As a result this ground of the assessee is allowed. Disallowance of professional charges paid to consultant for preparing project report to set up new power plant which did not materialize - HELD THAT:- As it is not disputed that the opportunity of allotment of a coal mine along with establishment of 600 MW Coal based Power Plant in Raigarh District, Chhattisgarh was offered to assessee. Neither the genuineness of expenditure nor the shelving of the power plant project due to non allotment of coal block is doubted by authorities below. The expenditure has been disallowed only by holding it to be capital in nature. As in the case of CIT v. Expanded Metal Mfrs [1991 (2) TMI 99 - ALLAHABAD HIGH COURT] held that - Where assessee firm, carrying on business of expenditure of iron metal by mechanical process and its supply, started a new business of manufacture of rubber products and for that purpose raised loan interest was allowable for relevant period even though during that period assessee's rubber factory did not work. The facts of the assessee case are similar and further supported by a catena of judgments as mentioned above. In these facts and circumstances respectfully following the se judgment we hold that assessee is eligible for claim of expenditure as revenue expenditure incurred for feasibility of new power project which could not commence. Appeal of the assessee is allowed.
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