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2021 (2) TMI 68 - AT - Income TaxDisallowance of subscription fees paid - Deloittee Touche Tohmatsu (DTT) charges subscription fees to Deloitte Hasking & Sells, Mumbai - AO observed that, the same is not in the nature of revenue expenditure and is also not expenses wholly & exclusively related to the business and therefore not allowable u/s section 37(1) - HELD THAT:- The issue of disallowance of subscription fees is concerned, we agree with the contentions of the Ld. Authorized Representative that this issue stands covered by the order of the Co-ordinate bench of this Tribunal in Assessment Year 2009-10 wherein held said amount was towards the reimbursement of the expenses, which was in fact incurred on behalf of the assessee and there was no profit element. Similar decision was taken for Assessment Years 2013-14 & 2014-15 [2019 (10) TMI 349 - ITAT AHMEDABAD] and assessment years 2011-12 and 2012-13 [2021 (1) TMI 738 - ITAT DELHI] - That being so, we decline to interfere with the order of Ld. CIT (A) deleting the aforesaid addition. we allow ground No.1 in both the years under consideration and direct the Assessing Officer to delete the disallowance. Allowability of legal and professional fees - whether the fees paid for defending the act of a partner can be considered to be an act committed during the ordinary course of business of the firm and whether the said expenditure can be said to have been incurred for the purpose of the business of the assessee? - HELD THAT:- Assessee firm is a firm of Chartered Accountants and Shri Deepak Roy, while working in the capacity of the partner of the firm, had signed an audit report. The Registrar of Companies, Uttar Pradesh and Uttaranchal lodged a complaint against Shri Deepak Roy in terms of Section-233 of the Companies Act, 1956 and it was under these circumstances that the assessee company decided to defend the case of Mr. Deepak Roy. Although, the assessee company was defending a case which was in the name of the partner Mr. Deepak Roy, it cannot be said that defending the said case was not a part of the business activity for the company in as much as the reputation and goodwill of the assessee company was at stake. It is also beyond the doubt that the criminal complaint was filed against Mr. Deepak Roy in a matter which was related to the business of the company. In such circumstances, it is our considered view that the impugned expenditure incurred by the assessee company towards defending the suit in the name of the partner is deductible business expenditure.
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