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2017 (9) TMI 812 - AT - Income TaxDisallowance of reimbursement of expenses on corporate overhead allocation - failure to furnish necessary direct and proximate evidences of nexus between reimbursement of corporate allocation expenses and income generating activity of the assessee - agreement between holding company and its group companies - Held that:- It is an admitted fact that only expenditure incurred in relation to earning income wholly and exclusively for the purposes of business of the assessee is allowed, as deduction. It is the primary onus of the assessee to prove the nexus between expenditure incurred and business connection of the assessee. In this case, the assessee has reimbursed certain expenses on the basis of an agreement between holding company and its group companies. The assessee claims that the holding company has rendered certain services as listed in the agreement. However, no such evidence has been furnished to the AO to prove as to what are the services rendered by its holding company. We further observe that the assessee has furnished certain additional evidence to prove the nexus between reimbursement of corporate overhead allocation and business activity of the assessee. The assessee claims that those details are not before the AO except copy of agreement between holding company and group companies. Therefore, we are of the considered view that the issue needs to be examined by the AO in the light of the additional evidence filed by the assessee. Hence, we set aside the issue to the file of the AO for reconsideration.
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