Allowability of Out of Court Settlement & Legal Expenses: ITAT Directs Re-adjudication

AC Chokshi Share Brokers Pvt Ltd Vs ACIT (ITAT Mumbai) The recent decision by the Income Tax Appellate Tribunal (ITAT) Mumbai has directed re-adjudication on the allowability of out of court settlement amount and legal expenses incurred by AC Chokshi Share Brokers Pvt Ltd, challenged against the CIT(A)’s order. The appeal revolves around the contention of whether these expenditures qualify as deductible business expenses under section 37(1) of the Income Tax Act, 1961. AC Chokshi Share Brokers Pvt Ltd, engaged in stock broking, incurred an out of court settlement amounting to Rs. 85,00,0...