| Case ID |
f74741c3-cdda-4943-b890-f832266684e8 |
| Body |
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| Case Number |
ITR NO. 134 OF 1989 |
| Decision Date |
Sep 22, 2006 |
| Hearing Date |
|
| Decision |
The Punjab and Haryana High Court ruled that the retainership fee paid to the standing counsel was allowable under the provisions of section 80VV of the Income-tax Act, 1961. The court found that the expenditure claimed was for representation before the Income-tax Appellate Tribunal, which qualified for deductions under the relevant provisions of the law. However, the court also highlighted that the deduction was limited to Rs. 5,000 as per section 80W of the Act. The tribunal's decision to disallow the excess amount was upheld, emphasizing that the expenditure must be directly related to income-tax proceedings to qualify for deduction. |
| Summary |
In the case of Dalima Biscuits (P.) Ltd. v. Commissioner of Income-tax, the Punjab and Haryana High Court addressed the issue of deductibility of retainership fees under the Income-tax Act, 1961. The case revolved around the interpretation of sections 80VV and 80W concerning deductions for expenses incurred during income-tax proceedings. The court noted that the payments made to the advocate were for legal representation before the income-tax authorities and were thus eligible for deductions. However, the court clarified that the allowable amount was capped at Rs. 5,000 under section 80W, which led to the disallowance of the excess claims made by the assessee. The decision highlights the importance of ensuring that legal fees are directly related to income-tax matters to qualify for deductions, reinforcing the principles of commercial expediency and the necessity of legal advice in tax planning. This case serves as a significant reference for taxpayers and legal professionals regarding the limits of deductibility for legal expenses in tax-related matters. |
| Court |
Punjab and Haryana High Court
|
| Entities Involved |
Not available
|
| Judges |
ADARSH KUMAR GOEL,
RAJESH BINDAL
|
| Lawyers |
P. G Jain,
Dr. N. L. Sharda
|
| Petitioners |
Dalima Biscuits (P.) Ltd.
|
| Respondents |
Commissioner of Income-tax
|
| Citations |
2008 SLD 2433 = (2008) 304 ITR 181
|
| Other Citations |
CIT v. Birla Cotton Spg. and Wvg. Mills Ltd. [1971] 82ITR166,
K. L Poddar and Sons P. Ltd. v. CIT [1991] 191 ITR 365 (Kam),
CIT v. Volga Restaurant [2002] 253 ITR 405 (Delhi)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
80VV,
37(1),
80W
|