Allowability of expenses over and above limits under 35d

It cannot be allowed as any other expenses.if department want to allow such balance expenses why it will restrict to 5%of cost of project or capital 

As per my opinion,the balance Rs Rs 12,500 ( Rs 17,500-5,000) shall not be allowed as normal business expneses u/s 37 as Section 37 covers only those expenditure which are not covered under section 30 to section 36.

Sec 37 (1) says that any expenditure (not being expenditure of the nature described in sections 30 to 36  and not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head “Profits and gains of business or profession”.