https://www.taxtmi.com/caselaws?id=39369 Legal expenses incurred in winding-up proceedings against a debtor-company were held to be revenue expenditure where the purpose was to protect loans advanced in the ordinary course of business. Deductibility depended on the nature and object of the litigation when initiated, not on its eventual result. On the facts, the winding-up petition was contested, there was no material to show a collusive or pre-arranged device to acquire control of the debtor-company, and the assessee had a legitimate business interest in safeguarding its advances and security. The later compromise did not change the original business purpose of the proceedings, so the expenditure was admissible as a revenue deduction and not capital expenditure. en-us Fri, 26 Dec 1975 00:00:00 +0530 Fri, 16 Apr 2010 10:36:50 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39369 Legal expenses incurred in winding-up proceedings against a debtor-company were held to be revenue expenditure where the purpose was to protect loans advanced in the ordinary course of business. Deductibility depended on the nature and object of the litigation when initiated, not on its eventual result. On the facts, the winding-up petition was contested, there was no material to show a collusive or pre-arranged device to acquire control of the debtor-company, and the assessee had a legitimate business interest in safeguarding its advances and security. The later compromise did not change the original business purpose of the proceedings, so the expenditure was admissible as a revenue deduction and not capital expenditure. Case-Laws Income Tax Fri, 26 Dec 1975 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39369