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TMI Blog1976 (11) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... d in law, the Tribunal was at all correct in its earlier conclusion that the said expenditure could be said to have been incurred wholly and exclusively for the purpose of the business of the assessee ?" Really speaking, the two concerned questions relate to the two aspects of the same matter as to whether the legal expenses of Rs. 75,000 incurred by the assessee in connection with Petition No. 114 of 1967 could be said to have been incurred wholly and exclusively for the purpose of the business of the company. Petition No. 114 of 1967 had been filed by the Central Government against the assessee-company and certain of its directors and officers seeking four prayers: (i) an order removing Smt. Rama Jain, Mr. Raj Narain Bagla, Mr. Narinder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit, reputation and management of the assessee and that such appointment was neither in the interest of the assessee nor in public interest nor freedom of press that it should be run by the special officer and that it would affect the freedom of speech and expression. The Tribunal has found that in so far as the allegations that were made by the Central Government in respect of the management, misappropriation and misconduct against its directors as well as its officers, the assessee-company did not raise any plea as it was not concerned with those allegations. In fact, so far as the allegations made against the General Manager, P. K. Roy, were concerned, in view of the advice received by it from its counsel, the assessee was advised to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee-company, viz., publication of newspapers containing news and views and having regard to the findings which have been recorded by the Tribunal to the effect that the assessee-company had merely resisted the petition so far as the last prayer made by the Government was concerned, we feel that the answer to the two questions sought to be raised before us are self-evident. It cannot be disputed, as was submitted by Mr. Joshi relying on the Supreme Court decision in Eastern Investments Ltd. v. CIT [1951] 20 ITR 1, that though the question as to whether a particular expenditure is a capital expenditure or a revenue expenditure must be decided on the facts of each case, the final conclusion being one of law. But, as we have stated above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 207, has observed that : " However wrong-headed, ill-advised, unduly optimistic or over-confident in his conviction the assessee might appear in the light of the ultimate decision, expenditure in starting and prosecuting a civil proceeding cannot be denied as a permissible deduction in computing the taxable income merely because the proceeding had failed, if otherwise the expenditure was laid out for the purpose of the business wholly and exclusively, that is, reasonably and honestly incurred to promote the interest of the business. Persistence of the assessee in launching the proceeding and carrying it from court to court and incurring expenditure for that purpose is not a ground for disallowing the claim." In the instant case, eve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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