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2008 (10) TMI 335 - HC - Income TaxBusiness Expenditure-The assessee was a transport corporation which was bound by law under section 146(3) of the Motor Vehicle Act to contribute towards the fund to meet the liability towards third party claims. The admitted position was that this amount was contributed on the basis of the number of vehicles owned as on the first day on the financial year and to satisfy the legal requirements. The assessee claimed that it had incurred a liability of Rs. 51,12,172 which represented the actual outgoing of the year by way of insurance payment and the assessee had taken into account Rs. 28.88 lakhs which was in the fund and had shown only the balance as actual payment. Therefore, what was claimed was deduction of actual revenue expenditure. The Assessing Officer disallowed the deduction but the Tribunal allowed it. Held that- the assessee would be entitled to deduct what it had actually paid towards insurance premium. Allow the appeal.
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