TMI Blog1993 (4) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction of legal expenses of Rs. 62,130 which included a sum of Rs. 18,000 paid to Messrs. Sawdev and Co. for sales tax and income-tax purposes and also a sum of Rs. 34,044 stated to have been spent for the purpose of pursuing certain writs against new imposts of Central excise. The Assessing Officer allowed 50 per cent. deduction in respect of legal expenses of Rs. 18,000. As regards Rs. 34,044 spent for writ matters in the High Courts, the Assessing Officer o served that the impost of Central excise was equally applicable to all the assessees similarly placed and was not in any way violative of the fundamental rights. The Assessing Officer, therefore, viewed that the legal expenses in that regard could not be said to be included in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he higher forum, if he is so advised. The only question is whether, on the facts incorporated in the statement of case, the reference can be decided or not. It appears that the legal expenses were incurred by the assessee in challenging the additional levy imposed by the Excise Act by the writ petition. According to the Income-tax Officer, the said legal expenses were not incidental to the assessee's business. It has not been disputed that such amount has been incurred by the assessee. The Commissioner of Income-tax (Appeals) upheld the action of the Income-tax Officer saying that this is merely an additional charge on the existing rate which does not in any way hamper the normal functioning of the company. "It is more in the form of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down by the. Supreme Court in CIT v. Birla Cotton Spinning and Weaving Mills Ltd. [1971] 82 ITR 166 will apply to the facts and circumstances of this case. Business expediency may not require that all expenses be incurred for earning immediate profits. Such expediency may also require that expenses be incurred to save business from coercive process and unlawful expropriation so that business may remain on sound footing and may earn greater profits in future. Where an assessee takes any steps for reducing its liability to tax which results in more funds being left for the purpose of carrying on the business or where the assessee takes steps for increasing the sale price for generating more funds for the purpose of carrying on business, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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