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TMI Blog1987 (9) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... nal accident insurance premium of Rs. 430, subscription to clubs amounting to Rs. 2,350 and reimbursement of medical expenditure of Rs. 2,331. The CIT (Appeals) upheld these disallowances. In the further appeal before us it was contended on behalf of the assessee that the personal accident insurance and club subscriptions were incurred for the benefit of the assessee-company and not for the benefit of the employee-Director and hence they should be disregard in computing the disallowances. Reliance was place on the decision in the case of ITO v. India Photographic Co. Ltd. [1987] 20 ITD 89 (Bom.) and in the case of CIT v. Amco Batteries Ltd. [1984] 150 ITR 48 (Kar). The Revenue objected to the exclusion of these amounts on the ground that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red before the Income-tax authorities relating to the determination of a liability under the Income-tax Act. According to the assessee, since this particular proceeding did not by itself determine any liability under the Act by way of tax, penalty or interest but only declared the assessee as an agent, the expenditure will not fall u/s 80VV. On the other hand, the Revenue referred to the heading of Chapter XV which is "liability in special cases" to emphasise that the treatment of the assessee as an agent also necessarily implies the determination of liability under the Income-tax Act and hence the litigation expenses thereto should be restricted by applying the provisions of section 80VV. 5. On a consideration of the rival submissions, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in view of the law expounded by the Supreme court in the case of CIT v. Biral Bros. (P) Ltd. [1971] 82 ITR 166 : "...... all legal/accountancy expenses incurred in connection with the proceedings before the Income-tax authorities right up to the stage of the Supreme Court will be allowed by way of deduction under section 37 of the Act." 6. The second item of the expenditure is the sum incurred for pursuing surtax appeals. Here again the proceedings not being a proceeding under the Income-tax Act it falls out of the scope of sec. 80VV. But the expenditure certainly falls within the dictum of the Supreme Court, cited above and hence will be allowable as a deduction u/s 37. 7. The assessee has not pressed the claim for the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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