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TMI Blog2006 (10) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law has been referred for the opinion of this court by the Income-tax Appellate Tribunal, Delhi Bench "A", New Delhi (for short, "the Tribunal"), arising out of its order dated November 29, 1985 in I. T. A. Nos. 3141 and 3256 (Delhi) of 1984, for the assessment year 1980-81: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the legal charges amounting to Rs. 20,343 paid to M/s. A. F. Ferguson and Co., were not hit by the provisions of section 80VV of the Income-tax Act, 1961, and were not subject to the ceiling fixed under section 80VV ?" 2. The assessee claimed deduction of Rs. 20,343 paid to M/s. A. F. Ferguson and Company, which was disallowed on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a business. These activities are continuous and take place from year to year during the whole period for which the business continues. If the assessee takes any steps for reducing its liability to tax which result in more funds being left for the purpose of carrying on the business there is always a possibility of higher profits . . . The expenditure which was incurred by the assessee in opposing a coercive governmental action with the object of saving taxation and safeguarding business was justified by commercial expediency and was, therefore, allowable under section 10(2)(xv) of the Act.' However, section 80VV of the Income-tax Act, 1961 (for short, 'the Act'), which was in force during the relevant assessment year, did not allow any ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act before the income-tax authority, or the Tribunal or any court relating to the determination of any liability under the Act by way of tax, penalty or interest. The Tribunal had noted that the amount was paid as retainer fee and was not relatable to any proceedings for determination of any liability under the Act by way of tax, penalty or interest. That being the factual conclusion, the answer to the second question is in the affirmative, in favour of the assessee and against the Revenue." 4. In view of the above, having regard to the finding of the Tribunal that the amount was paid not only for the services rendered for representation before the authorities but also for consultation, no fault can be found with the view tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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