9911796707
TMI Blog1990 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... another company. The details of the claim of expenditure are as follows : A. Paid Rs. (1) Exps. bill of advocate IPL 10,000.00 (2) Advt. bill of Shareholders ECC 7,711.20 ----------------- 17,711.20 ----------------- B. Provision 1. Advocate fees and exps. 34,000.00 2. Adv. bill of creditors meeting 7,712.00 3. Adv. bill of final notice 5,141.00 4. Stationery & Prtg. exps. 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of the company and so it was of capital nature. The Commissioner has dismissed the assessee's appeal in a very cursorary order as follows : " There are number of High Court decisions which supports the view taken by the ITO. The disallowance is therefore confirmed. " 3. Before the Tribunal the assessee's counsel relied upon the following decisions of the High Courts. (a) Addl. CIT v. W.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses taking the colour from the transaction to which they related but were items which were entitled to be judged in their own character. Legal expenses are not a direct item of expenditure connected with any capital item such as the acquisition of any capital asset or its expansion. 4. The learned departmental representative relied upon the following two decisions : Addl. CIT v. Rohit Mills Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d advantage of enduring nature and that therefore this expenditure which was connected with it was of capital nature and thus disallowable. He also relied upon the unreported decision of the Gujarat High Court in the case of New Commercial Co. [IT Reference No. 40 of 1972, dated 30-11-1978] where the judgment printed in Mr. Kaji's book. The assessee's counsel replied that the case reported in Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may benefit but the company itself ceases to exist. When this question was put to assessee's counsel he replied that the amalgamated company continues its existence through the amalgamating company. But that is not convincing. However, the aforesaid decision of the Madras High Court in the case of Bush Boake Allen India Ltd. as stated above holds that the allowability of legal expenses cannot tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
