Legal/ professional expense for opinion about prospective investment is not capital expenditure

Instel Services Pvt. Ltd Vs DCIT (ITAT Delhi)

ITAT Delhi held that expenses paid to legal and professionals for an opinion about legal and tax consequences of the prospective investment cannot be considered to be a capital expenditure. Such expenses are revenue in nature.

Facts-

Addition was made towards disallowance of legal and professional expenses; disallowance of business promotion expenses and disallowance of professional expenses

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