TaxTMI 
TaxTMI 
2006 (9) TMI 165
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....r section 37(1), the retainership fee paid on monthly basis to Shri D.N. Banerjee, Advocate was disallowable?" 2. Facts noticed by the Tribunal in the statement of case are that:- "The assessee company incurred on expenditure of Rs.2250/- on fee paid to Shri G. C. Sharma, Sr. Advocate and Rs.30,920/- on account of retainership fee paid to Shri D. N. Banerjee. The Assessing Officer observed that in the immediately preceding assessment year, Shri D. N. Banerjee had rendered advice on taxation matters only and had been sending the bills to the company relating to income tax matters for the assessment year 1979-80 under appeal. It was contended before the Assessing Officer that Shri D. N. Banerjee was an advocate and had rendered ad....
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....ional advisors was allowable. Reference may be made to judgment of the Hon'ble Supreme Court in C.I.T. v. Birla Cotton Spinning and Weaving Mills Ltd. (1971) 82 ITR 166, wherein it was observed (page 171, 172 of 82 ITR) :- "The essential test which has to be applied is whether the expenses were incurred for the preservation and protection of the assessee's business from any such process or proceedings which might have resulted in the reduction of its income and profits and whether the same were actually and honestly incurred. It is not possible to understand how the expenditure on the proceedings in respect of the Investigation Commission by the assessee will not fall within the above rule. Even otherwise, the expenditure was incidental ....
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....legislations. A counsel is retained so that the assessee may have the benefit of proper legal advice as and when problems arise. The assessee may also resort to a consultation with the tax consultant for the purpose of tax planning. There may be other questions arising in the course of the assessee's business touching upon the taxation laws. These problems cannot be separated itemwise nor can the fee paid to the consultant regarding income tax cases before the authorities and fee paid regarding other matters be apportioned. The retainer fee is to be considered as one entity for the entire services kept ready by counsel as and when the assessee seeks the advice." 7. In Commissioner of Income-Tax v. Volga Restaurant (2002) 253 ITR 405 (Del....
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....essee and has been paid retainership fee. In fact, during the course of hearing of the appeal he was present with Shri G. C. Sharma, the learned Senior Advocate. Shri Banerji conceded during the course of hearing before us that he has been appearing before the I. T. Appellate Authorities. The paper-books prepared bears the signatures of Shri Banerjee. This clearly showed that Shri Banerjee has rendered services in connection with proceedings before the Income Tax authorities. In the paper-book he has made written arguments on various issues quoting the various judicial pronouncements. The Assessing Officer has clearly recorded a finding that the assessee-company could not furnish before him as to what other services were rendered prior to t....