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“legal expenses”

Business ExpensesSection 37Section 37273 judgments

The decision most relied on for legal expenses is CIT v. Calcutta Agency Ltd. (19 ITR 191), cited in 164 judgments on BharatTax.

Leading authorities on legal expenses

CIT v. Calcutta Agency Ltd.
19 ITR 191 · 1951 · Supreme Court
164
citing judgments

The assessee bears the burden of proving necessary facts to claim deductions. If the assessee fails to establish these facts, the deduction is not admissible.

CIT v. Goetze (India) Ltd.
361 ITR 505 · 2014 · High Court
121
citing judgments

Disallowance under Section 14A for expenses relating to exempt income is required while computing book profit under Section 115JB. An Assessing Officer's order is erroneous for revision under Section 263 if the view taken was not plausible, legally unsustainable, and incorrect, requiring a recorded finding.

Kesoram Industries & Cotton Mills Ltd. v. CIT
196 ITR 845 · 1992 · High Court
61
citing judgments

Expenditure incurred for exploring the feasibility of expanding or extending an existing business by setting up a new unit in the same line of business is revenue expenditure, not capital expenditure. Such expenditure, including obtaining project reports or legal opinions on desirability or feasibility, does not constitute the setting up of a new business.

Commissioner of Income Tax v. India Discount Co. Ltd.
75 ITR 191 · 1970 · Supreme Court
46
citing judgments

Accounting entries do not override the legal effect of a transaction, and the legality of any transaction must be established independently. The mere nomenclature of an entry in the books of accounts is not determinative of the true nature of the transaction.

CIT v. Ganga Properties Ltd.
199 ITR 94 · 1993 · High Court
46
citing judgments

Expenditure incurred by a company for the purpose of its business, including expenses to fulfill statutory legal obligations or those related to an erstwhile business post-transfer, is allowable as revenue expenditure under Section 37 of the Income-tax Act.

CIT v. Finlay Mills Ltd.
20 ITR 475 · 1951 · Supreme Court
38
citing judgments

Expenditure that is incurred for the protection of a running business without generating a new asset is deductible as a business expense. Such expenditure does not result in an enduring benefit of a capital nature.

CIT v. Bombay Dyeing and Manufacturing Co. Ltd.
219 ITR 521 · 1996 · Supreme Court
28
citing judgments

Expenses incurred on amalgamation, legal and professional fees, and contributions to a State Housing Board for worker tenements are considered revenue expenditure, not capital expenditure. This is because these expenditures do not result in an enduring benefit and are part of the company's operational costs.

Sayaji Iron & Engineering Co. v. CIT
121 Taxmann 43 · 2002 · High Court
27
citing judgments

Expenses incurred by a company cannot be considered personal, as a company is an artificial legal entity incapable of incurring personal expenses. Therefore, disallowances on this basis are not sustainable.

Judgments citing legal expenses

Ygroo Digital Private Limited, Mumbai vs. ACIT, ACIT Circle 15(2)(1), Mumbai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1786/MUM/2021[2007-08]Status: DisposedITAT Mumbai02 Jun 2022AY 2007-08

Bench: Shri Pavan Kumar Gadale & Shri Gagan Goyalygroo Digital P Ltd, Vs. Acit, Cicle – 15(2)(1) Him & Kays House # Room No. 357, 3Rd 1, Powai Vihar, Floor, Aayakar Mumbai – 400076 Bhavan, Mk Road Mumbai-400020. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aacct4903A Appellant .. Respondent Appellant By : Mr.Mukesh Maheswari.Ar Respondent By : Ms.Kavita Kaushik.Dr Date Of Hearing 07.06.2022 Date Of Pronouncement 13.06.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order Of The Cit(A)- National Faceless Appeal Centre (Nfac), Delhi Passed U/S 143(3) R.W.S 254 & 250 Of The Act. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Mr.Mukesh Maheswari.ARFor Respondent: Ms.Kavita Kaushik.DR
Section 142(1)Section 143(3)Section 35D

total loss of Rs.79,06,055/- and the Assessing Officer(A.O) has made addition of personal expenses of Rs. 18,32,983/- and legal expenses of Rs. 12,04,032/- and assessed the total loss of Rs48,69,040/- and passed the order ... expenditure incurred by the group company and reimbursement and has confirmed the addition of Rs. 18,32,983/-. Whereas in respect of legal expenses of Rs. 12,04,032/- the CIT(A) has considered the provisions of preliminary expenditure u/s 35D of the Act and granted relief

Gmr Highways Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 3(1)(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 495/BANG/2020[2016-17]Status: DisposedITAT Bangalore25 May 2022AY 2016-17

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Gmr Highways Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle 3(1)(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1643/BANG/2019[2015-16]Status: DisposedITAT Bangalore25 May 2022AY 2015-16

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Assistant Commissioner of Income Tax, Central Circle-2(2), Bengaluru vs. M/S. Gmr Infrastructure Limited, Bengaluru

In the result, Ground no. 1 raised for A

ITA 1744/BANG/2017[2013-14]Status: DisposedITAT Bangalore25 May 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Assistant Commissioner of Income Tax, Central Circle-2(2), Bangalore vs. M/S. Gmr Infrastructure Limited, Bengaluru

In the result, Ground no. 1 raised for A

ITA 1743/BANG/2017[2012-13]Status: DisposedITAT Bangalore25 May 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Assistant Commissioner of Income Tax, Central Circle-2(2), Bengaluru vs. M/S. Gmr Infrastructure Limited, Bengaluru

In the result, Ground no. 1 raised for A

ITA 1742/BANG/2017[2011-12]Status: DisposedITAT Bangalore25 May 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Assistant Commissioner of Income Tax Central Circle-2(2), Bangalore vs. M/S Gmr Infrastructure Ltd, Bangalore

In the result, Ground no. 1 raised for A

ITA 1741/BANG/2017[2010-11]Status: DisposedITAT Bangalore25 May 2022AY 2010-11

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Gmr Infrastructure Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1705/BANG/2017[2010-11]Status: DisposedITAT Bangalore25 May 2022AY 2010-11

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Gmr Infrastructure Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1622/BANG/2017[2011-12]Status: DisposedITAT Bangalore25 May 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Gmr Infrastructure Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1600/BANG/2017[2013-14]Status: DisposedITAT Bangalore25 May 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Gmr Infrastructure Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1599/BANG/2017[2012-13]Status: DisposedITAT Bangalore25 May 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

submitted that the facts of Madras Industrial (supra) cannot be applied to the facts of the assessee since the assessee incurred upfront fees and legal expenses, which are in the nature of revenue expenses as held by Hon’ble Supreme Court in India Cement and Taparia Tools (supra

Mr.M J Aravind, Bangalore vs. Assistant Commissioner of Income Tax Circle-2(3)(1), Bangalore

In the result, the appeal filed by the assessee is dismissed

ITA 222/BANG/2019[2011-12]Status: DisposedITAT Bangalore25 Feb 2022AY 2011-12

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2011-12

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Shri Priyadarshi Mishra, Addl.CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 147Section 148Section 14ASection 48Section 57

stationery, staff welfare, flowers and plants, AGM expenses, Board meeting expenses, miscellaneous expenses, rent paid, subscription to club, Interest on purchase of car, legal expenses etc. Hence it is seen that as per the nature of expenses involved in that case, the expenses were in relation to the fulfilling

M/S. S P R Developers Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle- 1(3), Bangalore

In the result, all the appeals filed by the assessee are allowed

ITA 297/BANG/2020[2008-09]Status: DisposedITAT Bangalore09 Feb 2022AY 2008-09

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri L Bharath, C.AFor Respondent: Shri Pradeep Kumar, CIT (DR)
Section 153A

Income from other sources' and claimed expenses in nature of salary and allowances, postage, telephone, travel, car and conveyance, bank charges, other business expenses, legal expenses, depreciation, and other misc. expenses, however, question whether these staff, office and other related expenses had been incurred wholly and exclusively for purpose ... allowable to assessee - Held, yes .[para 57][ln favour of assessee] VI. Section 48 of the Income-Tax Act, 1961 - Capital gains - Computation of (Legal expenses) - Assessment year 2013-14 - Whether legal expenses incurred for court, consultancy and advice, and other expenses for filing of two court cases in respect

M/S. S P R Developers Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle- 1(3), Bangalore

In the result, all the appeals filed by the assessee are allowed

ITA 296/BANG/2020[2007-08]Status: DisposedITAT Bangalore09 Feb 2022AY 2007-08

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri L Bharath, C.AFor Respondent: Shri Pradeep Kumar, CIT (DR)
Section 153A

Income from other sources' and claimed expenses in nature of salary and allowances, postage, telephone, travel, car and conveyance, bank charges, other business expenses, legal expenses, depreciation, and other misc. expenses, however, question whether these staff, office and other related expenses had been incurred wholly and exclusively for purpose ... allowable to assessee - Held, yes .[para 57][ln favour of assessee] VI. Section 48 of the Income-Tax Act, 1961 - Capital gains - Computation of (Legal expenses) - Assessment year 2013-14 - Whether legal expenses incurred for court, consultancy and advice, and other expenses for filing of two court cases in respect

M/S. S P R Developers Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle- 1(3), Bangalore

In the result, all the appeals filed by the assessee are allowed

ITA 295/BANG/2020[2006-07]Status: DisposedITAT Bangalore09 Feb 2022AY 2006-07

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri L Bharath, C.AFor Respondent: Shri Pradeep Kumar, CIT (DR)
Section 153A

Income from other sources' and claimed expenses in nature of salary and allowances, postage, telephone, travel, car and conveyance, bank charges, other business expenses, legal expenses, depreciation, and other misc. expenses, however, question whether these staff, office and other related expenses had been incurred wholly and exclusively for purpose ... allowable to assessee - Held, yes .[para 57][ln favour of assessee] VI. Section 48 of the Income-Tax Act, 1961 - Capital gains - Computation of (Legal expenses) - Assessment year 2013-14 - Whether legal expenses incurred for court, consultancy and advice, and other expenses for filing of two court cases in respect

Anheuser Busch Inbev India Ltd., Mumbai vs. Pr. CIT-Circle-1, Mumbai

In the result, appeals filed by the assessee are allowed

ITA 942/MUM/2021[2014-15]Status: DisposedITAT Mumbai28 Jan 2022AY 2014-15

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble

For Appellant: Shri Rajan VoraFor Respondent: Ms. Shailja Rai
Section 143(3)Section 263Section 37Section 37(1)

IN THE INCOME TAX APPELLATE TRIBUNAL (VIRTUAL COURT) “A” BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER

Anheuser Busch Inbev India Ltd., Mumbai vs. Pr CIT, Circle-1, Mumbai

In the result, appeals filed by the assessee are allowed

ITA 941/MUM/2021[2013-14]Status: DisposedITAT Mumbai28 Jan 2022AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble

For Appellant: Shri Rajan VoraFor Respondent: Ms. Shailja Rai
Section 143(3)Section 263Section 37Section 37(1)

IN THE INCOME TAX APPELLATE TRIBUNAL (VIRTUAL COURT) “A” BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER

Magnum Aviation Pvt. Ltd., New Delhi vs. ITO, Ward- 16(1), New Delhi

In the result, the appeal of the assessee is allowed

ITA 6524/DEL/2017[2010-11]Status: DisposedITAT Delhi21 Dec 2021AY 2010-11

Bench: Shri Kul Bharat & Shri Pradip Kumar Kediaआयकर अपील सं./I.T.A. No.6524/Del/2017) ("नधा"रण वष" / Assessment Year: 2010-11)

For Appellant: Ms. Princy Singla, Sr. DR
Section 271(1)(c)Section 40A(3)

professional expenses Rs. 15,000/- is stated to be without any corroborative evidence warranting imposition of penalty. When we note circumstantially, the total legal expenses stand at Rs. 25,98,880/-. The assessee has large amount of brought forward losses of Rs. 60,20,188/- and returned a ‘NIL’ Income

Bumi Hiwat (India) P.Ltd, New Delhi vs. DCIT, Circle-5(1), New Delhi

In the result, appeal of the assessee is allowed

ITA 4932/DEL/2017[2009-10]Status: DisposedITAT Delhi30 Nov 2021AY 2009-10

Bench: Shri Anil Chaturvedi & Shri K. Narasimha Charyassessment Year: 2009-10 Bumi Hiwat (India) P. Ltd., Vs. Dcit, Circle 5(1), A1/292, Pankha Road, New Delhi. Janakpuri, New Delhi.

For Appellant: Mrs. Shashi M. Kapila, AdvFor Respondent: Sh. Satpal Gulati, CIT/DR
Section 143(3)Section 271(1)Section 271(1)(c)Section 274

Income Tax Act, 1961 (for short “the Act”) was complete by order dated 24/12/2011 by making certain additions on account of disallowance of legal expenses, interest on working capital, banking charges and foreign exchange loss. Learned Assessing Officer simultaneously initiated proceedings under section 271(1)(c) of the Act against

DCIT, New Delhi vs. M/S. Acquire Services Pvt. Ltd., New Delhi

In the result, appeal of the Revenue is dismissed

ITA 3192/DEL/2015[2011-12]Status: DisposedITAT Delhi11 Nov 2021AY 2011-12

Bench: Sh. Anil Chaturvedi & Sh. Sanjay Garg(Through Video Conferencing) Dcit Vs. M/S. Acquire Services Pvt. Circle – 1(2), Ltd., New Delhi Ground Floor, Central Wing, 124, Janpath Thapar House, Janpath Pan No. Aaacg 3351 K New Delhi-110 001 (Appellant) (Respondent) Assessee By Shri Piyush Kaushik, Adv. Revenue By Shri Nidhi Srivastava, Cit-D.R. Date Of Hearing: 06.10.2021 Date Of Pronouncement: 11.11.2021 Order Per Anil Chaturvedi, Am: This Appeal Filed By The Revenue Is Directed Against The Order Dated 27.01.2015 Of The Commissioner Of Income Tax (Appeals) – 4, New Delhi Relating To Assessment Year 2011-12. 2. The Relevant Facts As Culled From The Material On Records Are As Under :

Section 115JSection 143(3)Section 14ASection 14A(2)

attributed towards earning of dividend income. He therefore held that AO should have restricted the disallowance to the extent of personnel expenses (Rs.17.50 lakhs), legal expenses (9.43 lakhs) and communication expenses (Rs.24.93 lakh) only towards earning of taxed income to taxable income. He also noted that if the provision