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2017 (3) TMI 316 - AT - Income TaxAddition in respect of custom formality and custom expenses - Held that:- We find that during the survey proceedings, the director of the company had admitted that company would surrender the entire expenditure claimed under the head custom expenses and custom formalities, that on 31/03/2007 he filed an affidavit and partially retracted his statement, that the FAA restricted the disallowance at the rate of 25% of the expenditure as against the 100% disallowance made by the AO. We find that the FAA had given a categorical finding of fact that in some cases the assessee had raised the bills against such expenditure in the names of the customers and had offered such receipts in its return of income. If any income has been offered for taxation corresponding expenditure has to be allowed, is the cardinal principle of tax-jurisprudence. The FAA has restricted the disallowance to 25% as against the 100% disallowance made by the AO. We find that similar issue was decided by the Tribunal in the case of APL India Private Ltd. (2005 (5) TMI 288 - ITAT MADRAS-D) and held that in the case of clearing and forwarding agents the disallowance should not exceed 25%. - Decided against revenue.
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