2024 (8) TMI 1165

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.... 2. Identical issue is involved in both the appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. The facts pertaining to Asst Year 2014-15 are taken up for adjudication and the decision rendered thereon shall apply with equal force for Asst Year 2015-16 also except with variance in figures. 3. The only identical issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in confirming the disallowance of legal and professional charges in the facts and circumstances of the case. 4. We have heard the rival submissions and perused the materials available on record. During the year under consideration, the assessee was engaged in the business of hospital and research center. The ld. AO observed that the assessee had booked expenditure on payments to advocates for several court cases of Rs 2,80,788/- under the head "legal and professional expenses‟. The assessee was asked to give the details of the Court cases and to justify the allowability of such expenses as business expenditure of the assessee company. The details of the court cases together with the legal and professional charges paid to the ....

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....hence liable to be disallowed. 4.3. With the aforesaid observations, the ld. AO proceeded to disallow the legal and professional charges incurred hereinabove to the tune of Rs 8,36,633/- apart from disallowing the penalty of Rs 10,000/- paid by the assessee. 5. The aforesaid action of the ld. AO was upheld by the ld. CIT(A). 6. At the outset, it would be relevant to consider the details of expenses incurred in respect of legal and professional charges paid to Advocate Shri Rajiv Shanker Dvivedi of Rs 2,80,788/- for the following cases:- Details Of legal and professional for the year ended 31st March 2017 Name of party Address Particulars Amount TDS Remarks   M/s Rajiv Shankar Dvivedi 17S, Supreme Enclave Apptts, Mayur Vihar Phase- 1 New Delhi Civil Suit No. 274,Sr. Division, Fbd, Tited Dr. Anoop Chopra V/S Chrc 33,708 33,708 3000 The civil suits have been filed by the ex- partners of the  firm whose business have been taken over by  the assessee company.       Civil Suit No. 274,Sr. Division, Fbd, Tited Dr. Anoop Chopra V/S Chrc 47,304 4,210       Civil Suit....

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....e as well as personal expenditure of the directors/ ex- partners of the Company/ firm. In this connection, it is submitted as under:- "i) That the business of the erstwhile partnership firm was taken over by the appellant with effect from 01/04/2008 as a going concern with all its assets and liabilities. The copy of the balance sheet and accounts for the year ending 31/03/2008 is enclosed. The note no. Cl of Schedule 15 reads as under:" The Company has taken over the running business of the partnership firm M/s Central Hospital & Research Centre, a going concern with all the assets and liabilities w.e.f. 01.04.2008. The total assets and liabilities............ The suit filed by the is regarding the rendition of the accounts and to restrain the defendants from selling off, transferring, alienating creating third party rights or/and assigning in any manner whatsoever any of the moveable or immovable property of the hospital or belonging including the shares. iii) In this connection, it is further submitted as under:- In the various judicial decisions, it has been held that the expenses of civil litigation is permissible as an expense which....

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....y the Haryana State Pollution Control Board for not obtaining environment clearance. i) In the said complaint, it was stated that the environmental clearance from the competent authority (State Environment impact Assessment Authority, Haryana) is required before starting any operation/ construction of projects etc. for more than 20,000 sq. Mts. by any interested person or persons and all the procedure has been provided there in the notifications. ii) It was alleged that the appellant Company has made new construction of more than 20,000 sq. Mts. and has completed the same without obtaining any prior Environment Clearance from the Ministry of Environment and forest or State Environment Impact Assessment Authority, Haryana as per the procedure laid down in the notification and as such this construction being raised in violation of notification thereof, invited action u/s 15 of the Environment Protection Act. iii) During the trial, the appellant contented that the notification dated 14/09/2006 is only applicable to the projects and is not applicable to the construction activity. The Hon'ble Court stayed the further proceedings in the matter. A copy of th....

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....Del) which reads as under:- "This is a reference at the request of the Commissioner of Income-tax by the Income-tax Appellate Tribunal. The respondent-assessee is New Garage Ltd., which is now under winding up. The reference relates to the assessment year 1962-63. The assessee is a limited company. The business of the assessee during the previous year relevant to the assessment year 1962-63 was that of repairing vehicles, selling tractors, implements and spares purchased from M/s. Escorts Ltd. For the purpose of this business, the assessee-company maintained a show-room at No. 11, Scindia House, New Delhi. Sometime in the year 1961, the subscribed capital of the company was raised from Rs. 1 lakh to Rs. 2 lakhs. All the newly issued shares were purchased by what has been described as the Escorts group, and the Escorts group thus came to have a controlling interest in the assessee-company. The landord of the above premises filed a suit against the assessee-company for eviction. Subsequently, the suit was compromised and the assessee agreed to pay a sum of Rs. 10,000. While completing the assessment for 1962-63, the ITO refused to give the....