Expenses incurred by statutory authority was allowable as business expenditure

Indore Development Authority Vs DCIT (Exemption) (ITAT Indore)

Conclusion: Certain expenses incurred by assessee such as IMC Transfer Expenses, City Environment Expenses, Contribution and Aid Expenses, Land Acquisition and Diversion Expenses  was allowable considering expenses must be incurred for assessee’s business purposes, consistent allowance of similar expenses in the past. Once the impugned expenses were included in closing inventory, effectively there was no deduction claimed by assessee and no disallowance was warranted.

Held:

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