2004 (2) TMI 50

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....reference at the instance of the Revenue, the following question of law has been referred for our opinion for the assessment year 1983-84: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that legal expenses incurred by the assessee-company in connection with the amalgamation of the assessee-company with another company were revenue expenses ....

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.... ITR 306 and held that legal expenses would be allowable and directed the Income-tax Officer to work out the legal expenses and allow the same. For that purpose, the matter was restored to the Income-tax Officer. We have heard Mrs. Mauna M. Bhatt, learned standing counsel for the Revenue. Though served, none appears for the respondent-assessee. Learned standing counsel for the Revenue has su....

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.... was claimed as revenue expenditure. The Income-tax Officer and the Appellate Assistant Commissioner rejected the claim but the Tribunal allowed it on the ground that as both the companies were carrying on complementary business and their amalgamation was necessary for the smooth and efficient conduct of the business, it was an expenditure laid out wholly and exclusively for the purpose of the bus....

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....business of the company, whether it is the transferee-company or the transferor-company. Hence, merely because the assessee-company in the instant case was a transferor-company, it cannot be said that the expenditure of legal fees was not incurred wholly and exclusively for the purpose of the business of the assessee. It is also necessary to appreciate that when the legal expenses are to be pai....