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The appellant company was no way involved in the legal proceedings taken against the Directors / Shareholders in their individual capacities. Moreover, it is pertinent to note that the Assessing Officer as well as the CIT(A) recorded the fact that the details of the nature of the legal expenses was not forthcoming from the appellant. In the aforesaid facts, 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. Thus, not entertained.

Shanti Prime Publication Pvt. Ltd.

Sec. 37 of Income Tax Act, 1961—Business Expenditure—Legal expenses incurred by assessee company was not for the purpose of carrying out its business, therefore, not allowable as expenditure under Section 37.

Facts: The basic issue is dis-allowance of legal expenses claimed to be incurred by the assessee company in all the four assessment years under Section 37(1).

Held, that all the authorities under the Act have come to a finding of fact that the legal expenses incurred by assessee company was not for the purpose of carrying out its business and, therefore, was not allowable as expenditure under Section 37. 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 assessee company. In fact, the complaint filed before the Chief Metropolitan Magistrate Court has been made against the Directors / Shareholders in individual capacities. The entire dispute between the various group of shareholders was only to acquire the management and control of the assessee company and, therefore, these expenses are not expenses incurred for and on behalf of the company but expenses incurred for the Directors / Shareholders for their individual benefit so as to retain control and management of assessee company. The Tribunal has observed the fact that legal proceedings were also commenced against its Auditors / Company Secretary were only on off-shoot of the inter se dispute between different shareholders of assessee company. It thus noticed that assessee company was no way involved in the legal proceedings taken against the Directors / Shareholders in their individual capacities. Moreover, it is pertinent to note that AO as well as the CIT(A) recorded the fact that the details of the nature of the legal expenses was not forthcoming from the assessee . In the aforesaid facts, 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. Therefore, the four appeals are dismissed. - NATIONAL REFINERY PVT. LTD. V/s ASSTT. CIT - [2020] 424 ITR 267 (BOM)

The appellant company was no way involved in the legal proceedings taken against the Directors / Shareholders in their individual capacities. Moreover, it is pertinent to note that the Assessing Officer as well as the CIT(A) recorded the fact that the details of the nature of the legal expenses was not forthcoming from the appellant. In the aforesaid facts, 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. Thus, not entertained.

Shanti Prime Publication Pvt. Ltd.

Facts: The basic issue is dis-allowance of legal expenses claimed to be incurred by the assessee company in all the four assessment years under Section 37(1).