Section 37(1) : Advocate Fees for bail of Driver not allowed

Fee paid to advocate for seeking bail of driver of assessee was disallowable

IN THE ITAT DELHI BENCH 'H'

T And T Motors Ltd.

v.

Additional Commissioner of Income-tax*

R.S. SYAL, ACCOUNTANT MEMBER
AND A.T. VARKEY, JUDICIAL MEMBER

IT APPEAL NO. 6490 (DELHI) OF 2012
[ASSESSMENT YEAR 2009-10]

JANUARY  7, 2015 

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Advocate fees)- Assessment year 2009-10 - Assessee-company claimed deduction on account of legal fees supported by a bill of advocate which showed that assessee's driver was taken into custody pursuant to an accident and amount was paid as advocate fee for seeking his bail - Assessing Officer disallowed said claim - Whether since Explanation to section 37(1) prohibits deduction of expenditure incurred for a purpose which was an offence or prohibited by law, amount paid as advocate fee was to be disallowed - Held, yes [Para 10] [In favour of revenue]