Deductibility of stamp duty and registration expenses upheld where books supported the claim and no contrary material existed.

Stamp duty and registration expenses were treated as deductible business es where the assessee followed the Percentage Completion Method, disclosed the amounts in the profit and loss account and under duties and taxes, and the opening and closing work-in-progress were undisputed. The adjustment was made only on an assumption that project cost included sales promotion expenses, but the books did not provide specific support for that view. On that basis, the disallowance was found unjustified and deleted in favour of the assessee.

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Issues: Whether the disallowance of stamp duty and registration expenses incurred by the assessee was justified.

Analysis: The assessee had accounted for revenue on the Percentage Completion Method, reflected the impugned expenses in the profit and loss account and in the return under the head "Duties and Taxes", and the opening and closing work-in-progress was not disputed. The addition was made on an assumption that the project cost included sales promotion expenses, but no specific material from the books supported that view.

Conclusion: The disallowance of Rs. 9,79,600/- was held to be unjustified and was deleted in favour of the assessee.

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