Section 37 of Income tax Act, 1961—Disallowance of expenses— In the instant case, the basic question is disallowance of legal expenses claimed to be incurred by the appellant company in all the four assessment years under Section 37(1) of the Act.

As per AO the legal expenses incurred by the appellant company was not for the purpose of carrying out its business and, therefore, was not allowable as expenditure under Section 37 of the Act. It held that these legal expenses were incurred so as to protect the Directors / Shareholders of the company in respect of the complaints filed against them in their individual capacity and not in respect of their conduct in the course of carrying on the business of the appellant company.

Held that— the view taken by the Authorities under the Act including the Tribunal, is a possible view on facts and cannot be said to be perverse. In these circumstances, the questions as proposed in all the four appeals do not give rise to any substantial question of law.[NATIONAL REFINERY PVT. LTD. VERSUS ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 5 (2)] [2019] 19 ITCD Online (2) [BOMBAY HIGH COURT]