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2024 (3) TMI 884 - ITAT JODHPURAllowable expenditure u/s 37(1) - addition relating to form fees which was deposited for obtaining the wine shop through government - non-accepting the theory of commercial expediency - argued that the assessee has made multiple applications for lottery to obtaining the wine shop licence and for that he has made 20 application of each 15,000/- the payment has been made by banking channel. As the state government has not put any restriction on making number of application the genuine business expenditure being in accordance with the law cannot be denied u/s. 37(1) Whether the money paid for making 20 applications by the assessee by way of application fees paid for allotment of licence for liquor shop from his bank account as the same is allotted based on the lottery system and the fees paid is non-refundable? - HELD THAT:- Before us AO though ld. DR did not controvert the fact that the assessee has made 20 application and only one was accepted so the payment of application to increase the probability of the allotment is licence cannot be denied to the assessee when the assessee has demonstrated the payment from the bank statement, filed an affidavit confirming the fact and most important amongst all the allotment of licence is not disputed by the revenue. Thus, the money paid for making 20 applications for the allotment of liquor licence cannot be disallowed as the same is in respect of the business of the assessee and he has been allotted liquor licence shop in Jaipur as clearly confirmed by the ld. AO in the order. Considering these specific fact and confirmation of the assessee by way of an affidavit that even the amount paid for applying licence in 20 numbers for his business and therefore denial of claim of expenditure u/s 37(1) of the Act is not correct and therefore, the same is directed to be allowed and addition made by the ld. AO confirmed by the ld. CIT(A) is directed to be deleted. In terms of these observations, the appeal of the assessee is allowed.
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