Compensation paid for loss to clients due to negligence of employees of assessee is allowable expense

Ashwani Financial Services (P.) Ltd. Vs. JCIT (ITAT Amritsar) Circular No. 35 issued by Board clearly states the losses arising due to negligence of employees has to be allowed as expense if the loss took place in the normal course of the business and the amount involved was necessarily kept for the purpose of business. In the present case, the losses were necessarily incurred in the normal course of business of assessee and therefore, the expenditure was allowable. Full Text of the ITAT Order is as follows:- This is an appeal filed by assessee against the order of learned Commissioner (Appe...