a) Assessee was arrested by the Department of Revenue Intelligence (DRI) on charge of evading customs duty on import of palm oil.
b) It claimed deduction of legal fees paid to lawyers for representing his criminal case before High Court and Lower Courts.
c) The Assessing Officer (AO) held that legal expenditure was in the nature of personal expenditure and disallowed the same.
d) CIT(A) affirmed the order of AO by holding that the expenditure incurred for defending the criminal proceedings could not be allowed under any provision of Income Tax Act.
e) Aggrieved by the order of CIT(A), assessee filed the instant appeal before the tribunal.
The tribunal held in favour of revenue as under:
1) Expenditure on legal fees and proceedings could be allowed under section 37 if it was wholly or exclusively related to carrying on the business of the assessee, but in this case, legal fees was paid to defend criminal prosecution which was totally unrelated to the business of assessee.
2) Therefore, the expenditure so incurred was rightly disallowed as it was having no connection with carrying on business of assessee- Praveen Saxena v. Joint CIT  52 taxmann.com 451 (Delhi - Trib.)