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TMI Blog2020 (11) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... account of professional and legal fees - revenue or capital expenditure - HELD THAT:- Professional fees paid by Appellant are for existing business and not incurred for analyzing the market for new line of business or is not for diversification of its business. By incurring such expenditure, Appellant is constantly getting updates regarding market survey carried out for existing product line and same does not give any enduring benefit or is not in nature of capital expenditure. The expenses are not incur red for exploring the market for a new product and rather expenses is incurred for exploring the circumstances as to how Assessee should manage it s existing business more effectively hence relying upon the decision of Hon'ble Delhi ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer to allow the expenditure of ₹ 29,78,601/- (39,71,468 less 9,92,867) incurred on account of professional and legal fees by holding the same as revenue in character? 3. We have heard Ms. Mauna Bhatt, the learned senior standing counsel appearing for the Revenue and Mr. S.N. Soparkar, the learned senior counsel assisted by Mr. B.S. Soparkar, the learned counsel appearing for the respondent-assessee. 4. The Tribunal, while dismissing the appeal of the Revenue on the question of disallowance under Section 14A of the Act, has observed thus; 6. We have heard the rival submission on the issue. It was pointed out on behalf of the assessee that the assessee has earned exempt income only to the extent of ₹ 7,38,000/- duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court in CIT vs. Chettinad Logistics (P.) Ltd. (2018) 95 taxmann.com 250 (SC). Hence, in conformity with the judicial precedents, we find substantial merit in the conclusion drawn b y the CIT(A) for limiting the disallowance to the extent of exempt income. Hence, we decline to interfere. 5. On the second question as proposed by the Revenue in the present appeal, the findings recorded by the Tribunal are as under; On careful consideration of observation of Assessing Officer and contention of Appellant, it can be seen that the fact of the case is similar to the earlier assessment year i.e A.Y. 2011-12 wherein undersigned vide order dated 26/04/2016 in appeal No. CIT(A)-1/72/ DCIT,Cir- 1(1) (1)/2015-16 has held as under:- 6.3. I have car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot incurred for analyzing the market for new line of business or is not for diversification of its business. By incurring such expenditure, Appellant is constantly getting updates regarding market survey carried out for existing product line and same does not give any enduring benefit or is not in nature of capital expenditure. The expenses are not incur red for exploring the market for a new product and rather expenses is incurred for exploring the circumstances as to how Assessee should manage it s existing business more effectively hence relying upon the decision of Hon'ble Delhi ITAT in the case of KJS India Pvt. Limited 45 SOT 17 expenditure incur red by Appellant is business expenditure allowable under Section 37 of the Act. The H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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