9911796707
TMI Blog2015 (10) TMI 1604X X X X Extracts X X X X X X X X Extracts X X X X ..... these expenses relates to prior period i.e. incurred in FY 2004-05 relevant to AY 2005-06 and not to the FY 2005-06 relevant to AY under dispute 2006-07. Today, when Ld. counsel for the assessee was enquired about the year of incurring of these expenses and also whether the assessee is in the business of pollution control devices, he categorically admitted that this is a new line of business, which was to be started. According to him, this was on- going process and these expenses are for earning of future income. We find no substance in the argument of the Ld. counsel for the assessee and the lower authorities have given a concurrent finding that there is no business relating to this project, which is abandoned. In such circumstances, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent engineering products and for furtherance of its business the petitioner undertook research and development work of one equipment for automobile pollution control which is need of the day and the entire expenses so incurred in carrying out the said research work which is an ongoing process till the final approval by the competent authority, is very much in thenature of business expenses and the same is allowable. 3. For that the Ld. Appellate Authority failed to appreciate the submission and documents as was filed by the appellant to substantiate the nature of expenses and the said order is otherwise arbitrary in all respect and is liable to be quashed and/or deleted. 3. Briefly stated facts are that the assessee has debited a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia and therefore not an allowable expenditure in the relevant AY. I agree with the contention of the AO that the appellant had no business activity in past years or in the relevant year which can be said to be related to Multi Fuel System and the claim of expenditure is disallowable. Therefore, it is seen that the AO has disallowed the claim of the appellant in view of the specific provision of section 37(1) of the Act by holding that the expenses are not expended wholly and exclusively for the purpose of the business and hence not allowable expenditure. In my opinion, the view of the AO is correct so as the non-allowability of the expenditure U/s 37(1) of the Act is concerned. The further opinion of the AO that even otherwise the expens ..... X X X X Extracts X X X X X X X X Extracts X X X X
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