Tribunal allows appeal, condones filing delay, directs deletion of professional fees. Dismisses second appeal as infructuous.

The Tribunal allowed the appeal in ITA No. 4665/Mum/2017, condoning the delay in filing and directing the deletion of the addition of professional fees. The appeal in ITA No. 5525/Mum/2016 was dismissed as infructuous since the main appeal was allowed.

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Issues Involved:
- Condonation of delay in filing appeal against orders under Sections 143(3) and 154 of the Income Tax Act, 1961
- Disallowance of professional fees as business expenditure under Section 37(1) or capital expenditure

Condonation of Delay in Filing Appeal:
The appeals filed by the assessee challenged orders passed by the CIT(A)-14, Mumbai arising from Assessing Officer's orders under Sections 143(3) and 154 of the Income Tax Act, 1961 for the assessment year 2009-10. The delay in filing the appeal against the order under Section 143(3) was 1625 days. The assessee explained that the delay was due to following the advice of the Chief Accountant to opt for rectification under Section 154 rather than appeal. The CIT(A) rejected the application for condonation of delay without discussing the merits of the case. The Tribunal, citing the decision in the case of Atlas Copco (India) Ltd, upheld the condonation of delay, emphasizing that there was no negligence or inaction on the part of the assessee, and the delay was unintentional and based on advice.

Disallowance of Professional Fees:
The Assessing Officer disallowed professional fees of &8377; 7,50,000 paid by the assessee to M/s. M. N. Dastur & Co. for valuation of know-how, stating it was not acceptable without providing reasons. The CIT(A) upheld this disallowance without giving a decision on the matter. The assessee argued that the expenditure was incurred in the course of business and should be allowed as revenue expenditure under Section 37(1) of the Act. Alternatively, it was contended that if treated as capital, depreciation should be allowed. The Tribunal analyzed the nature of the expenditure, finding that it did not result in the creation of a capital asset or enduring benefit. The expenditure was for valuation, not acquisition, of know-how, and did not add value to the asset. Therefore, it was held to be revenue expenditure under Section 37(1) and directed the Assessing Officer to delete the addition made on account of professional fees. Consequently, the appeal against the order under Section 154 was dismissed as infructuous.

In conclusion, the Tribunal allowed the appeal in ITA No. 4665/Mum/2017, condoning the delay in filing and directing the deletion of the addition of professional fees. The appeal in ITA No. 5525/Mum/2016 was dismissed as infructuous since the main appeal was allowed.

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