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2017 (8) TMI 239 - HC - Income TaxLegal expenditure - nature of expenditure - revenue or capital - allowability of business expenditure - Held that:- Payment of money made by the assessee therein was in order to perfect his title to the capital asset. It was a lump sum payment for acquisition of a capital asset and therefore, Hon'ble Supreme Court in case of Mangalore Ganesh Beedi Works v. CIT [2015 (10) TMI 1283 - SUPREME COURT] held that the amount should be treated as capital payment and the assessee was not entitled to exclude from the income sought to be assessed in his hands any portion of that amount. But having regard to the facts in the present case noted above and by applying the decisions in the aforementioned judgments, we find that the Tribunal was justified in holding in favour of the assessee and thereby, dismissing Department's appeal. The substantial question of law sought to be raised by the Department is answered by holding that the legal expenditure incurred by the assessee to defend the writ petitions filed to quash the Government notification and lease deed is not a capital expenditure and deduction is allowable within the meaning of Section 37 of the Act, as it is revenue expenditure. - Decided in favour of assessee.
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