Expense cannot be disallowed for internal financial arrangements to fund expenditure

Power Company of Karnataka Ltd. Vs ACIT (ITAT Mumbai) Conclusion: Since there were internal financial arrangements made by assessee with ESCOMs to fund the expenditure, therefore, this could not disentitle assessee to claim expenditure in accordance with the Act and the income of assessee had to be computed under the provisions of the Act without looking into how the expenditure was financed by assessee and it could not cause any prejudice to assessee as it was financed by the seed money or other mode of sources of fund. Held: Assessee was a public sector company responsible for capacity addit...