TMI Blog2009 (2) TMI 853X X X X Extracts X X X X X X X X Extracts X X X X ..... Range 4(2), Mumbai [hereinafter referred to as 'the DCIT] of re-opening the assessment under section 147 of the income-tax Act, 1961. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the action of the DCIT in disallowing legal fees of ₹ 90,00,625. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in upholding the action of the DCIT in disallowing depository charges of ₹ 31,07,102. 3. Briefly stated, the assessee filed return of income of ₹ 10.11 crores on 29.11.2000 which was processed under section 143(1) on 16.03.2002. Subsequently it was noticed by the A.O. that certain prior period expenditure was claimed wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Davis Polk and wardwell, Hongkong and were incurred for the services availed during the period relevant to assessment year 1999-2000. However, under the Foreign Exchange Regulation Act, 1973 the payment to overseas lawyers were subject to specific approval of the Reserve Bank of India which was received during the year on 17.09.1999 and, hence, the claim was made in this year. Since the liability crystallised only during the current assessment year it is an allowable expenditure of the year. 5. The learned counsel submitted that the liability to make payment accrued only in the year of approval by the Reserve Bank of India and relied upon the Hon'ble Bombay High Court decision in the case of CIT vs. Kirloskar Tractors Ltd. 231 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv. Sutna Stone and Lime Co. vs. CIT 192 ITR 478 (Cal) v. Kanpur Tannery Ltd. vs. CIT 34 ITR 863 (All) vi. United Bank of India vs. DCIT 68 ITD 332 (Cal) vii. S.P. Jaiswal Estates (P) Ltd. vs. CIT 216 ITR 145 (Cal) viii. CIT vs. Nathmal Tolaram 88 ITR 234 (Guj) 7. Further it was submitted that the turnover fees/charges payable to SEBI is also covered by the provisions of section 43B, therefore, is allowable in the year of payment and further he relied upon the decisions of the Hon'ble ITAT in the case of ITO vs. Sureshchand Jain 102 TTJ 970 (Mum). 8. The learned D.R. submitted that the Assessing Officer has recorded the reasons and has authority to initiate proceedings under section 147 as decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payments in question in the previous years relevant to the assessment years under consideration and the remittances were also made in the same year. That being so, the liability to pay the amount pertaining to the earlier assessment years could be said to have accrued or arisen only in the year under consideration and the same was, therefore, allowable as deduction in the computation of the income. The Hon'ble Bombay High Court has followed the decision of the Hon'ble Supreme Court in the case of Nonsuch Tea Estate Ltd. vs. CIT 98 ITR 189 and similarly followed in the latter decision of the Hon'ble Bombay High Court in the case of Dorr Oliver India Ltd. vs. CIT 234 ITR 723 . In view of the above the liability to make ..... X X X X Extracts X X X X X X X X Extracts X X X X
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