AVITEL POST STUDIOZ LIMITED ,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX , CIRCLE 6(1)(2), MUMBAI

ITA 5242/MUM/2024Status: DisposedITAT Mumbai24 July 2025AY 2012-13Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)16 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the impugned expenditures were incurred in the ordinary course of business, either for expansion, investor compliance, or defending legal proceedings, and did not result in the creation of a capital asset or enduring benefit. Therefore, they were allowable as revenue expenditure.

What were the facts?

The assessee claimed legal and professional expenses of Rs. 1,58,51,240/-. The Assessing Officer disallowed these expenses, holding them to be capital in nature or unrelated to business activities. The CIT(A) confirmed the disallowance.

What were the issues?

Whether legal and professional expenses incurred in relation to investment activities and restructuring are capital or revenue in nature.

Which sections of the Income-tax Act were involved?

Section 37(1)

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Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, ‘A’ BENCH

For Appellant: Shri Vimal Punmiya
For Respondent: Shri Aditya M.Rai, Sr. DR
Hearing: 19/06/2025Pronounced: 24/07/2025

PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 07/08/2024 passed by NFAC, Delhi for the quantum of assessment passed u/s.143(3) r.w.s. 147 for the A.Y.2012-13. 2. The assessee is merely aggrieved by disallowance of legal and professional expenses aggregating to Rs.1,58,51,240/-.

2 Avital Post Studioz Limited

3.

The brief facts are that the assessee, M/s Avitel Post Studioz Ltd., is engaged in the business of providing post- production services for films, including archiving, digital restoration, telexing, editing, visual effects, and related activities. For the assessment year 2012–13, it filed its return of income on 30/11/2012 declaring total income of Rs.

The order continues below.

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