1992 (1) TMI 28

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.... here concerns the extent of permissible deductions in respect of expenditure incurred by the assessee in connection with proceedings before the relevant authorities under the Incometax Act, 1961, or in court, relating to determination of liability under the said Act, by way of tax, penalty or interest. The controversy raised pertains to the assessment year 1977-78. The points in issue rest ....

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.... deduction under this head was limited to Rs. 5,000. The assessee's claim for deduction in respect of the remaining amount of Rs. 35,431, was accordingly disallowed. On appeal, the Appellate Assistant Commissioner allowed a further deduction of Rs. 1,500 on the ground that this expenditure had been incurred for professional services relatable to accountancy matters. The Tribunal, on its part, uphe....

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.... err in law in not excluding the expenditure referable to assessment years earlier than 1976-77 from the scope of the restrictions imposed by the said section ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in rejecting the assessee's contentions that the limitation embedded in section 80VV of the Act is applicable separately to expenditure re....

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....ould not be allowed as a deduction under this section, namely, section 37 of the Act. On a plain reading of the provisions of section 80VV of the Act, it will be seen that it merely limits the extent to which deductions would be permissible in respect of legal proceedings taken by an assessee with regard to tax, penalty or interest, demanded or payable by him under the Act. Reading these provis....