TMI Blog2023 (9) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the expenses incurred, that expenditure was incurred for various personnel and that it had direct correlation to the business of Respondent. Both appellate authorities also accepted that no construction business would run without incurring such kind of expenditure. CIT(A) and ITAT having come to factual finding that the expenses incurred by the Respondent-Assessee on salary of the office employees/management fees do not have any direct nexus with the project and can not be disallowed on the proportionate basis because such expenditure fall in the category of expenditure incurred for running of day to day business, no substantial question of law arises. - K.R. SHRIRAM DR. N.K. GOKHALE, JJ. For the Appellant : Mr. Akhiles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26.32% of these debited amounts because in the opinion of AO, Respondent followed Project Completion Method of accounting and the project was completed only upto 26.32%. Accordingly 73.68% of Rs. 3,02,27,781/- (Rs. 2,75,87,391/- + Rs. 26,40,390/-) amounting to Rs. 2,22,71,831/- was disallowed and added to the total income. Sponsorship fees of Rs. 16,21,061/- and management fees of Rs. 6,08,533/-, the AO treated them as capital expenditure as the AO felt it was enduring in nature. AO allowed 25% depreciation on the said amounts. Certain further disallowances and also additions were made by AO and the assessment under Section 143(3) of the Income Tax Act, 1961 ( the Act ) was completed on 22nd February 2013. 3. Being aggrieved by the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) came to the conclusion that it was not a one-time expenditure incurred in Assessment Year 2010-2011, which is the year in question or that the expenditure incurred would provide Respondent any benefit of enduring nature. 7. On facts, a conclusion has been arrived at that it was incurred towards day to day expenditure incurred on project staff and sales team, which was necessary for exhibition or promotion of a construction project. The CIT(A) held, in view thereof, there was no justification for restricting the expenditure of project to 26.32% only. 8. The ITAT concurred with the view expressed by the CIT(A). Both appellate authorities found that there was no doubt about the genuineness of the expenses incurred, that expenditure wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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