Ajit K. Sengupta, J. - (1.) In this reference under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1983-84, the following question of law has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in deleting the addition of Rs. 34,044 being the legal expenses in connection with writ matters against new imposts of Central excise ?"
(2.) Shortly, the facts are that the assessee claimed deduction of legal expenses of Rs. 62,130 which included a sum of Rs. 18,000 paid to Messrs. Sawdev and Co. for sales tax and income-tax purposes and also a sum of Rs. 34,044 stated to have been spent for the purpose of pursuing certain writs against new imposts of Central excise. The Assessing Officer allowed 50 per cent. deduction in respect of legal expenses of Rs. 18,000. As regards Rs. 34,044 spent for writ matters in the High Courts, the Assessing Officer observed that the impost of Central excise was equally applicable to all the assessees similarly placed and was not in any way violative of the fundamental rights.
(3.) The Assessing Officer, therefore, viewed that the legal expenses in that regard could not be said to be included in the assessee's business and, therefore, disallowed Rs. 34,044 on the item.;