TMI Blog2021 (8) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 - SUPREME COURT] and proceeded to delete the adhoc disallowance made by the ld. AO. Before us none of the categorical findings recorded by the ld. CIT(A) had been controverted by the Revenue. It is not in dispute that assessee had indeed earned business income in the form of service charges and same has been assessed as business income by the ld. AO. This itself goes to prove that assessee had indeed carried on business during the year. Once, it is accepted that assessee had carried on business during the year, and when the expenditure debited in the P L account are not doubted either on its genuineness or on its incurrence for the purpose of business of the assessee by the ld. AO, the expenditure thereon, claimed as deduction by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red on behalf of the assessee. We have heard ld. DR and perused the materials available on record. We find that assessee company is engaged in the business of analysis, investment, research, financial consultancy and providing related services and solutions and also trading in multi commodity exchange and in currency futures. The return of income for the A.Y.2011-12 was filed by the assessee company on 30/11/2011 declaring total loss of ₹ 5,72,02,195/-. We find that assessee had shown the receipt of service charges of ₹ 93,93,878/- and other income of ₹ 22,23,526/- as business income and the same has been assessed as such by the ld. AO. These two sums were duly credited in profit and loss account of the business activity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 hour shift basis. Its staff strength was 45 excluding 2 Directors. The assessee also gave break-up of expenditure of ₹ 10,66,45,068/- as under:- Loss from Commodity Futures : ₹ 1,46,29,741 Depreciation : ₹ 1,18,34,254 ₹ 2,64,63,995 Payment/provision for employees: ₹ 87,83,374 Operating Expenses : ₹ 7,11,66,145 Finance Charges : ₹ 2,31,454 ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of income tax return. Accountancy, PF/ESIC/PT/TDS obtaining transfer pricing certificate and other tax related queries The said expense not being directly relatable to the project was debited to profit and loss account 3D Electricity expenses 12,31,193 The entire office has a backup UPS The said expense not being directly relatable to the project was debited to profit and loss account 3E Payment to auditors 9,92,700 The said expenditure was incurred by the Appellant in relation to statutory audit carried for the subject year The said expense not being directly relatable to the project was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in view of the fact that assessee s major client in London had to wind up their business. As a result, the assessee s mark up was reduced from 20% to 5%. It was also pointed out that no defects were pointed out in the books of accounts / vouchers and supporting evidences submitted by the ld. AO. The book results of the assessee has not been rejected u/s.145(3) of the Act by the ld. AO. Hence, it was vehemently argued that the ld. AO ought not to have made any adhoc disallowance of expenditure in the assessment merely on the ground that the same did not commensurate with the business receipts earned by the assessee. 3.4. We find that the ld. CIT(A) had deleted the entire disallowance of expenditure on adhoc basis made by the ld. AO by g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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