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2019 (8) TMI 1708 - AT - Income TaxNature of expenditure - stamp duty and service fees - revenue or capital expenditure - CIT(A) allowed the expenditure incurred on stamp duty paid for availing various loans and legal expenses/ services fee as business expenditure - AO’s main contention for disallowance is that first this is a capital expenditure, reason being the loan is taken for the purpose of acquiring capital asset and hence, stamp duty paid, registration fee paid and lawyer’s fee paid is capital expenditure - HELD THAT:- Assessee is able to prove that these expenses were routine expenses incurred by the assessee during the course of business for the reason that on account of these loans no capital asset has been created by incurring such expenditure. We noted that even Hon’ble Supreme Court in the case of India Cement Ltd.[1965 (12) TMI 22 - SUPREME COURT] held that the stamp duty, registration fee, lawyers fee etc., paid for obtaining loan was eligible for business expenditure. We noted that the aforesaid amounts were reflected in the schedule 12 of the balance sheet in the Revenue’s account as interest and finance charges. Also the assessee has suo moto capitalize the expenses which were to be capitalized as is evident from Schedule 13 of the balance sheet, which is in Revenue’s account. We noted from the copies of the agreement that these expenses were incurred on stamp duty, service fee, lawyer’s fee being legal expenses for filing various loan and services for trusteeship of MSE bonds. In view of the above, we are of the view that the CIT(A) has rightly allowed the claim of the assessee of these expenses as business expenditure under section 37(1) of the Act and hence, we do not want to interfere in the same. This issue of Revenue’s appeal is dismissed.
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