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TMI Blog2010 (3) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... r) These two cross appeals one by the assessee and the another by the Revenue are directed against the common order passed by the CIT(A)-III, Hyderabad dated 6.3.2009 and pertains to the assessment years 2005-06 and 2006-07. Since common issues are involved in these two cross appeals, they are clubbed together, heard together and disposed for the sake of convenience vide this common order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee during the course of survey and no books of account was produced during the assessment proceedings, the assessing officer estimated the total receipt of the year at ₹ 56,58,408/- on the basis of receipt books impounded during the survey. Since the assessee has admitted only gross receipts at ₹ 20,91,331/- in its profit and loss account and he admitted undisclosed inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The DR submitted that the profit to be estimated after considering the location of the business premises, competition in the business in that locality, availability of employees etc., He submitted that in the present case, the hospital is situated in a best locality at Karimnagar and estimated income by assessing officer to be sustained . 6. We have heard both the parties and perused the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be allowed. We are not agreeing with this proposition. There are two kinds of expenditure to be incurred by the assessee. One is fixed expenditure and the other one is variable expenditure. Fixed expenditure of the assessee is fixed and does not change depending upon the gross receipts. However, variable expenditure will change depending upon the quantum of business carried on. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure to be allowed in proportion as incurred by the assessee for disclosed receipts. Thus, the assessing officer is required to bifurcate the expenditure as fixed and variable expenses and thereafter ascertain the variable expenses and give deduction for the same. The issue is set aside to the file of assessing officer for fresh adjudication. 9. In the result, both the appeals of the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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