Ajit K.Sengupta, J. - (1.) In this reference under Section 256(1) of the Income tax Act, 1961, for the assessment year 1977-78, the following question of law has been referred to this court: "Whether, on the facts and in the circumstances of the case, the professional charges of Rs. 5,000 paid for obtaining advice for preparation of income-tax return fall within the scope of Section 80VV of the Income-tax Act, 1961 ?" The facts shortly stated are that the assessee claimed deduction for expenses of Rs. 15,100, Rs. 5,000 included which on account of professional charges for preparation of the return for 1976, Rs. 4,100 being the travelling expenses for two visits made by the assessee's representative from Bombay to Calcutta and the balance amount being fees for income-tax appeals for the assessment years 1974-75 and 1975-76. The Income-tax Officer did not allow the said expenses as deduction.
(2.) Being aggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) who allowed Rs. 5,000 under Section 80VV of the Act. The assessee then took the matter to the Tribunal and submitted that all these expenses were allowable and the Commissioner of Income-tax (Appeals) was not justified in restricting the allowance to Rs. 5,000 only. According to him, Section 80VV refers only to expenditure incurred by the assessee in respect of any proceedings before any income-tax authority or the Appellate Tribunal or any court relating to determination of any liability under this Act. This section does not refer to the travelling expenses incurred by the representatives of the assessee in coming from any place in order to give advice or appear before the income-tax authorities, the Income-tax Appellate Tribunal or any court. The expenses of Rs. 4,100 are, therefore, allowable. Similarly, the professional charges for consultation paid at Rs. 5,000 are also allowable because they have not been incurred in connection with the appearance before any of the authorities mentioned above. The balance of Rs. 6,000 were in connection with their fees for income-tax appeals for appearing before the authorities mentioned above. Thus, the assessee is entitled to the entire deduction.
(3.) The contention of the Revenue was that these expenses were incurred in connection with the proceedings before the authorities mentioned above. It hardly makes any difference whether those expenses were incurred in connection with the consultation, travelling or appearance before the said authorities.;