2007 (1) TMI 293

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....1. That on the facts and circumstances of the case and in law, the order passed by the CIT(Appeals) confirming the additions made by the Assessing Officer is bad in law and deserves to be quashed. 2. That on the facts and circumstances of the case and in law, the CIT(Appeals) erred in agreeing with the Assessing Officer that the fee paid for US GAAP of Rs. 2,53,825 does not relate to the business carried on by the appellant. 3. That on the facts and in the circumstances of the case and in law, the CIT(Appeals) has erred in holding that the fees of Rs. 2,53,825 paid to the auditors for US GAAP work has not been incurred wholly and exclusively for the business operations in India." 2. Rival contentions have been heard and record peru....

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....the purposes of management information system reporting (MIS) report their financial results compliant with US GAAP to there head office. 5. As per our considered view, the expression "for the purpose of business" includes expenditure voluntarily incurred for commercial expediency, and it is immaterial if a third party also benefits thereby. The expression "commercial expediency" is an expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as business expenditure if it was incurred on grounds of commercial expediency. Commercial expediency also includes voluntary expenditure not havi....