TMI Blog2022 (5) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... e view of Ld. Tax Authorities then it was not justified to discredit the bills raised by them for services holding that assessee failed to provide substantive evidence and it could not succeed in getting supply of paper during the year or even failed to take over the company. The business uncertainties are infinite and to discredit any professional service on basis that concerned business activity having failed inspite of professional service, is not prudent approach. The very purpose of availin such services of professionals is to ensure that the entrepreneur understands well the SWOT analysis of prospective business activity. Entrepreneur s own experience is not a ground for tax authorities to question the wisdom of assessee to have engag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsulting report/ feasibility study on connected business activity, which was ultimately abandoned can be debit under the head legal and professional charges as a revenue expenditure. - Decided in favour of assessee. - ITA No. 2484/Del/2019 - - - Dated:- 29-4-2022 - Sh. R.K.Panda, Accountant Member And Sh. Anubhav Sharma, Judicial Member For the Assessee : Sh. Ved Jain, Adv. And Sh. Aman Garg, CA For the Revenue : Sh. Vivek Vardhan, Sr. DR ORDER PER ANUBHAV SHARMA, JM: The appeal has been preferred by the appeal against order dated 28.01.2019 in appeal no. 83/2016-17 for the assessment year 2013-14 passed by Commissioner of Income Tax (Appeal)-34, New Delhi (hereinafter referred as the Ld. First Appellate Aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with M/s Garnett Specialty Papers Ltd. for firstly commencing of purchase of paper from the supplier of paper thereafter takeover of the supplier company. 2. The Ld. CIT(A) has erred in confirming the disallowance out of legal professional charges without appreciating the fact that purchase of paper was duly carried out with M/s Garnett Specialty Ltd. in succeeding year and as the legal and professional charges were paid to bring into existence a new business opportunity in existing line of business with a view to earn more profit and therefore it represents a bonafide business expenses allowable as per provisions of the Income Tax Act. The appellant craves leave to add, alter, amend, modify or forego any of the grounds of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the expenditure made on professional services.:- 1. Commissioner of Income Tax vs. Priya Village Roadshows Ltd. 2009 (8) TMI 765-Delhi High Court 2.Krishak Bharati Cooperative ltd. vs. Jt. Commissioner of Income Tax, Special Range 12, New Delhi 2014 (9) TMI 99- ITAT Delhi 3. Shree Digvijay Cement Co. Ltd. Vs. A.C.I.T. Circle-2, Jamnagar. 2019 (10) TMI 1229-ITAT Rajkot 4.M/s. NYK Line (India) Ltd. vs. Addl. Commissioner of Income Tax , Mumbai 2015 (10) TMI 2375-ITAT Mumbai 5. Kee Pharma Ltd., New Delhi vs. ITO, ITA No. 6092/Del/2015, ITAT Delhi 5.1 On the other hand, ld. DR supported the orders of Ld. Tax Authorities below submitting that the same are well reasoned. 6. The bench has given thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as expenses were incurred for acquiring or taking over of the company they could not be revenue in nature and not allowable as claimed by the appellant. Backward or forward integration of the activities of a manufacturing business cannot be considered to be establishment of a new enterprises to consider such legal and professional expenses to be for acquiring new assets and to not treat them revenue expenditure. Hon ble Delhi High Court in Commissioner of Income Tax vs. Priya Village Roadshows Ltd. (supra) has held that expenses incurred in preparation of feasibility report in the same line of business has to be treated as revenue expenditure. In this judgment itself Hon ble High Court has also taken into consideration that if the project ..... X X X X Extracts X X X X X X X X Extracts X X X X
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