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2010 (4) TMI 858 - ALLAHABAD HIGH COURTDisallowance of expenses - Printing of balance-sheet and on printing and despatch of dividend warrant – Held that:- expenses incurred on printing of balance-sheet and on printing and despatch of dividend warrant were incurred by the assessee for the compliance with the statutory requirement as prescribed under the Companies Act and are revenue in nature - order of the Tribunal is, accordingly, upheld. Deduction under sections 80HH and 80-I of the Act - profits in two units and the loss of the third unit – Held that:- under section 80-I(6) of the Act for the purposes of calculating the deduction, the loss sustained in one of the units, cannot be taken into account because sub-section (6) of the Act contemplates that only the profits shall be taken into account as if it was the only source of income - for the purposes of computation of gross total income the losses of other units are to be taken into account but for the purposes of calculating the deduction of industrial undertaking, the loss sustained in another unit cannot be taken into account and only the profit shall be taken into account as if it was the only source of income of that unit - no error in the order of the Tribunal - Payment of customs duty in the earlier year and not in the year under consideration - customs duty was paid the same was not debited to the profit and loss account – Held that:- No customs duty has been paid in the year under consideration in respect of such transaction and, therefore, in view of section 43B of the Act the customs duty, which was not paid during the year under consideration, cannot be allowed as a deduction – Order of Tribunal set aside Whether the payment made by the assessee towards the membership of the club is an allowable deduction, we find that the expenditure was incurred in order to procure business - as the amount was spent towards advancement of business. It is a business expenditure and, therefore, has rightly been allowed as it is not specifically covered by any statutory provision wherein it has to be disallowed - In favour of the assessee Finance charges and lease charges – Held that:- money had not passed from the lessor/purchaser to the assessee-company and that the assessee-company had utilised the same in its business - Finance charges and lease charges partly allowed Bad debts - deduction for bad debts with reference to section 36(1)(vii) of the Act – Held that:- assessee has complied with both the requirements, namely, that the amount has been considered for computation of income in the earlier years and the debt has been written off in the books of account – deduction is allowed Custom duty under section 43B – Held that:- entire amount of excise duty/cus- cutoms duty paid by the assessee in a particular accounting year is allowable under section 43B of the Income-tax Act, 1961, as a deduction in respect of that year, irrespective of the amount of excise duty/customs duty included in the valuation of the assessee's closing stock at the end of the accounting year as relating thereto - In favour of the assessee Addition under section 40A(2)(b) - excessive and unreasonable - M/s. MRL allowed the assessee to use the flats taken by it on lease for the purpose of its business against reimbursement of rent paid by M/s. MRL to the landlord – Held that:- Assessing Officer has failed to prove by any comparable case or comparison by market rate that the amount paid by the assessee was excessive or unreasonable - premise was in occupation and use of the assessee and the claim of the rent was not false - assessee has paid the actual rent and reimbursed the actual expenditure incurred by M/s. MRL – Addition deleted order of the Tribunal, in this regard, is liable to be upheld.
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