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TMI Blog1972 (1) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ection with the proceedings would be an admissible charge against the income of the relevant year - - - - - Dated:- 25-1-1972 - Judge(s) : HARI SWARUP., R. S. PATHAK. JUDGMENT The judgment of the court was delivered by PATHAK J.-The Income-tax Appellate Tribunal has referred the following question: "Whether, on the facts and in the circumstances of the case, the expenses totalling Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovery proceedings had been taken by the income-tax department to the demands created. The legal proceedings taken included appellate proceedings taken before the authorities, under the Income-tax Act, writ petitions filed in the High Court and legal opinion obtained in connection with those proceedings. The Income-tax Officer rejected the claim and his decision was maintained by the Appellate As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court observed : " The essential test which has to be applied is whether the expenses were incurred for the preservation and protection of the assessee's business from any such process or proceedings which might have resulted in the reduction of its income and profits and whether the same were actually and honestly incurred. . . .. It must be remembered that the earning of profits and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing legal proceedings, it referred to proceedings which were prosecuted bona fide and not with an ulterior motive. If the object of the proceedings is to reduce the tax liability of the assessee, we see no reason why the case should not fall within the rule laid down by the Supreme Court. The consideration that the case relates to income alleged to have been concealed is not relevant at all. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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