TMI Blog2020 (11) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-novo assessment when the facts of the case are clear and the case is liable to be quashed. 3. The brief facts of the case are as under :- The appellant is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of port and allied activities at Jaigad, Maharashtra. It is a joint venture on BOOST basis between the assessee s holding company and the Government of Maharashtra. The appellant had filed the return of income through electronic mode on 28.09.2011 disclosing a loss of ₹ 2,44,01,285/-. Against the said return of income, the assessment was taken for scrutiny and the assessment was completed by the Assistant Commissioner of Income Tax, Ratnagiri Circle, Ratnagiri at a loss o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proper enquiries as regards to the allowability of the legal and professional charges of ₹ 10 lakhs. Accordingly, he concluded that the assessment order is erroneous and prejudicial to the interests of the Revenue therefore set-aside the assessment for de-novo examination of the issue to the Assessing Officer vide order dated 18.03.2016 passed u/s 263 of the Act. 6. Being aggrieved by the above order of the Pr. CIT, the appellant is in appeal before us in the present appeal. 7. Before us, the ld. AR submitted that during the course of original assessment proceedings, the Assessing Officer had called for the details of the legal and professional charges incurred vide Assessing Officer s letter dated 08.11.2013 which is placed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... setting aside the whole of the assessment order placing reliance on the decision of the Hon ble Delhi High Court in the case of Addl. CIT vs. J. K. D Costa, 133 ITR 7. 8. On the other hand, ld. CIT-DR vehemently supported the order of the ld. Pr. CIT and submitted that the decision of the Hon ble Jurisdictional High Court in the case of Aker Powergas Pvt. Ltd. (supra) was not available at the time of assessment. He further submitted that the decision of Hon ble Apex Court in the case of Malabar Industrial Co. Ltd. vs. CIT, 243 ITR 83 has no application to the facts of the present case. He further submitted that there was change of incumbent and subsequent incumbent had not called for any details. Thus, it was submitted that it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this issue of allowability of legal and professional charges of ₹ 10 lakhs. The Hon ble Jurisdictional High Court in the case of Aker Powergas Pvt. Ltd. (supra) clearly held that even though the legal expenses are incurred in connection with the capital asset, the same are allowable as revenue expenditure after referring to the decision of the Hon ble Madras High Court in the case of Bush Boake Allen India Ltd. (supra) wherein the Hon ble Madras High Court following the decision of the Hon ble Supreme Court in the case of India Cements Ltd. vs. CIT, 60 ITR 52 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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