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TMI Blog2004 (2) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenses and allowable as deduction - - - - - Dated:- 12-2-2004 - Judge(s) : M. S. SHAH., A. M. KAPADIA. JUDGMENT The judgment of the court was delivered by M.S. SHAH J.--In this reference at the instance of the Revenue, the following question of law has been referred for our opinion for the assessment year 1983-84: "Whether, on the facts and in the circumstances of the case, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of the assessee. The Department went in appeal before the Tribunal. The Tribunal relied on the decision of the Madras High Court in CIT v. Bush Boake Allen (India) Ltd. [1982] 135 ITR 306 and held that legal expenses would be allowable and directed the Income-tax Officer to work out the legal expenses and allow the same. For that purpose, the matter was restored to the Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , an expenditure of Rs. 10,350 was incurred by the assessee-company towards professional charges paid to a firm of solicitors. In the assessment proceedings, deduction of the said amount was claimed as revenue expenditure. The Income-tax Officer and the Appellate Assistant Commissioner rejected the claim but the Tribunal allowed it on the ground that as both the companies were carrying on compleme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unciated by the apex court in the above decision would still apply because where two companies are amalgamated, such amalgamation is resorted to for smooth and efficient conduct of the business of the company, whether it is the transferee-company or the transferor-company. Hence, merely because the assessee-company in the instant case was a transferor-company, it cannot be said that the expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amalgamation is resorted to for the smooth and efficient conduct of the business through the transferee-company, it has to be held that the legal expenses are laid out wholly and exclusively for the purpose of the business of the assessee-company. In view of the above discussion, we are of the view that the Tribunal was right in law in holding that legal expenses incurred by the assessee-compan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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