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2020 (10) TMI 270 - AT - Income TaxDisallowance of expenditure u/s. 36(1)(iii) - Disallowance of expenditure u/s. 37(1) r.w.s. 57(iii) - CIT-A deleted disallowance - As per CIT-A assessee business was of provision of financial services and hence held that the pre-commencement expenses were allowable - Whether CIT(A) ought not to have allowed entire business expenditure against interest income without examining the nature of expenses ? - HELD THAT:- We find that the Ld. CIT(A) has also taken cognizance of the fact that during the assessment year 2016-17, the assessee has changed the main object as business and removed the object of hotel business from the Memorandum of Association Since the business of the assessee company during the relevant assessment year was only financial services, the income earned during the relevant assessment year ought to be assessed as business income and the entire expenditure incurred by the assessee for earning such income has to be allowed as deduction. Needles to mention, nothing on record is before us to suggest that the assessee company was indulging in any other business activity during the relevant assessment year. Therefore we are of the considered view that the expenditure incurred by the assessee towards salary has also to be allowed as deduction while computing the business income of the assessee for the relevant assessment year. Accordingly we hereby direct the Ld.AO to delete the addition - Decided in favour of assessee.
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