Case Law Details
R. Systems International Ltd Vs ACIT (ITAT Delhi)
The issue under consideration is whether A.O. is correct in disallowing claim of stamp duty and registration charges by considering it as capital expenditure?
The assessee stated that the amount was incurred towards stamp duty and registration charges for execution of lease deed. Assessee is of the opinion that these expenses should be allowed u/s 37(1).
The impugned expenditure did not involve any element of premium in the amount claimed as expenditure. It was incurred only to draw up and get registered an effective and proper lease deed and would have remained the same irrespective of the period of lease as long as it was more than one year. Further, the period of lease itself could not be decisive of the question whether the asset was of enduring nature. On these facts, the impugned expenditure was revenue in nature.
Hence, ITAT state that the legal expenses have to be allowed u/s 37(1) of the Act. Accordingly, appeal is allowed.
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