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TMI Blog1989 (3) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... AL CHAND MITAL J. The Income-tax Appellate Tribunal, Chandigarh, has referred the following questions for our opinion : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal rightly upheld the disallowance of the expenditure of Rs. 7,732 ? 2. Whether the Appellate Tribunal has been right in law in holding that the assessee was not entitled to deduction of surtax payable b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . For the legal advice tendered, Rs. 7,732 were paid to the aforesaid company. Ultimately, land was not purchased. When the matter came before the Income-tax Officer, deduction of Rs. 7,732 was claimed by way of revenue expenditure. The Income-tax Officer and the Appellate Assistant Commissioner disallowed the claim of deduction on the ground that the expenses incurred were in connection with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of the assessee and the said fee could not be added to the value of the land even if ultimately the land had been purchased and such an expense would always be revenue expenditure and for this proposition placed reliance on India Cements Ltd. v. CIT [1966] 60 ITR 52, a Supreme Court decision. On the other hand, learned counsel for the Revenue has placed reliance on Rajasthan Construction Co. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction Co.'s case [1984] 148 ITR 61 (Bom), is clearly distinguishable, as there the question was not whether the fee paid for obtaining legal advice amounted to an expense of a revenue or capital nature. The question was regarding the litigation expenses. Whether that decision is right or not is not the point before us. Accordingly, we answer question No. 1 in favour of the assessee, that is, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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