Protection of voting rights and investment interests through litigation expenses qualifies as revenue expenditure deductible under income-tax law.

Litigation expenses incurred to defend existing voting rights and investment interests in shares were treated as revenue expenditure because they did not create, cure, complete, or improve title to any capital asset. The expenditure was directed only to protecting existing investments and preserving valuable rights attached to the shares, which formed part of the assessee's business activity. On that basis, the amount was allowable as a deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922.

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Issues: Whether litigation expenses incurred by an assessee to defend its voting rights and investment interests in shares were allowable as revenue expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922.

Analysis: The expenses were incurred in resisting a suit that sought to restrain the assessee from exercising voting rights and other rights attached to its shares. The expenditure did not create, cure, or complete title to a capital asset, nor did it result in the acquisition of any new asset. The protection of existing investments and the preservation of valuable voting rights formed part of the assessee's business activity, and the suit threatened those interests generally.

Conclusion: The litigation expenses were revenue expenditure and were allowable as a deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922, in favour of the assessee.

Ratio Decidendi: Expenditure incurred solely to protect existing investments and voting rights, without acquisition or improvement of a capital asset, is allowable as revenue expenditure.

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