2018 (11) TMI 1105

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....e brief facts of the case are that the Assessing Officer observed that the assessee has claimed loss from business of Rs. 3,58,644/- whereas its only business did not recognise revenue as all the expenditure incurred till the end of this year i.e. 31.03.2012 were included in work in progress. He observed that on verification of the profit and loss account vis-a-vis the composition of increase in work in progress as well as the expenditure relatable to house property income, it is found that its claim of expenditure in profit and loss account aggregating to Rs. 5,53,358/- was related to increase in work in progress which is its principal business. The assessee claimed it as a expenditure against the business income whereas the assessee itsel....

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....the deal. This receipt of Rs. 2,00,000/- was offered as business income. Accordingly it was submitted that Director's remuneration should be allowed. 6. The CIT(A) observed that rental receipt of the appellant company has been assessed under the head 'House Property'. There is only one other receipt of Rs. 2,00,000/- being compensation on cancellation of the property transaction. The remuneration to the directors is on a higher side looking at the extent of business and the revenue of Rs. 2,00,000/- shown. Accordingly the compensation to the directors of Rs. 2,60,000/- would be fair and reasonable and therefore he restricted the disallowance to Rs. 2,60,000/-. 7. Before me the Authorised Representative of the assessee reiterated th....

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....oods, services or facilities for which the payment is made ; or (b) the legitimate needs of the business of the assessee ; or (c) the benefits derived by or accruing to the assessee on receipt of such goods, services or facilities, then the Assessing Officer shall not allow as a deduction so much of the expenditure as is so considered by the Assessing Officer to be excessive or unreasonable. Therefore, it becomes apparent that the Assessing Officer is required to record a finding as to whether the expenditure is excessive or unreasonable in relation to any one of the three requirements prescribed, which are independent and alternative to each other. All the three requirements need not exist simultaneously. In a given case, if any one condit....