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2020 (11) TMI 67 - AT - Income TaxRevision u/s 263 - allowability of legal and professional charges incurred in connection with the acquisitions of New Ship Lift System - revenue or capital expenditure - HELD THAT:- As during the course of assessment proceedings, AO had called for the details regarding the true nature of legal and professional expenses and the same was explained by the assessee on being satisfied the Assessing Officer had chosen not to make any addition. The fact that the assessment order does not discuss about this item of the expenditure does not mean that the AO had not examined the issue. In the circumstances, it cannot be said that there was no enquiry by the AO on this issue of allowability of legal and professional charges. Madras High Court in the case of Bush Boake Allen India Ltd. [1981 (10) TMI 32 - MADRAS HIGH COURT] wherein following the decision of India Cements Ltd. [1965 (12) TMI 22 - SUPREME COURT] held that merely because the expenditure was incurred in connection with the capital assets, the same cannot be treated as capital in nature. It is settled principle of law that once the High Court lays down particular the proposition of law, the same is deemed to be in existence from the inception. Fact would clearly suggest that there was no material on record to hold that the legal and professional expenses are not allowable as revenue expenditure. AO only took one of the possible views and, therefore, the Pr. CIT was not justified in exercising the power of revision - Decided in favour of assessee.
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