TMI Blog2003 (1) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... llant that the annual value of the property under possession of tresspassers would be nil and in consequence he has erred in taking the annual value of the property under reference at Rs. 3,14,400 and the learned CIT(A) in the alternative has erred in not accepting the contention that the appellant is entitled to deduction under s. 24(1)(x) of the IT Act, 1961 r/w r. 4 of the IT Rules, 1961, in consequence of which the appellant was entitled to deduction in the year under reference of the amount of Rs. 3,14,400 as unrealized rent. He has erred in not appreciating the judgment referred by him of the Supreme Court reported as CIT vs. Madho Pd. Jatia 1976 CTR (SC) 438 : (1976) 105 ITR 179 (SC) and consequently the provisions of law in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be restored." 4. At the time of hearing of the appeal, Sh. Ravish Sood, the learned counsel for the assessee did not press ground Nos. 1, 2, 3 and 5 and hence the same are dismissed as not pressed. 5. Now, the sole ground agitated by the assessee and also that of the Department revolves around litigation/legal expenses. The assessee claimed a sum of Rs. 61,329 as legal expenses. The AO required the assessee to explain the nature of the said expenses. In response to the said query, the assessee submitted that the "claim of litigation expenses is allowable to the assessee under s. 37 of the IT Act, 1961, because the assessee has instituted a civil suit against M/s Remington Rand of India Ltd. for ejectment/possession and recovery of charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cent of the ALV. In this case, the ALV has been determined and that has been sustained comes to Rs. 6,31,194. 6 per cent of the collection charges would come to Rs. 37,871. In the assessment order, a deduction of Rs. 16,250 has been given for collection charges and, therefore the appellant-firm is entitled to a further deduction of Rs. 21,621." 7. Before us, Sh. Ravish Sood, advocate, the learned counsel for the assessee, reiterated the submissions made before the authorities below. He further submitted that it is well settled that expenditure incurred for preservation or protection of business is to be considered as revenue in nature and not as capital in nature. He, therefore, submitted that the learned CIT(A) ought to have deleted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. Ltd. vs. CIT (1971) 81 ITR 754 (SC), the Hon'ble Supreme Court has held as under: "Where litigation expenses are incurred by the assessee for the purpose of creating, curing or completing the assessees title to the capital, then the expenses incurred must be considered as capital expenditure. But if the litigation expenses are incurred to protect the business of the assessee, they must be considered as a revenue expenditure" In the instant case, both the authorities below have not denied this fact that the expenses in question were incurred to protect the business interest of the assessee and, therefore, we can safely hold that the expenses were definitely of Revenue nature. Furthermore, there is no material on record to controvert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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