30 August 2014
Full reverse charge is applicable on services provided by a lawyer to a business entity. The service recipient has to pay service tax on such services. As far as your comment that CA do not allow legal fees in P&L is concerned I do not agree with it.
30 August 2014
First of all let me clarify that C.A's in India have no authority to allow legal fees debited in the P & L a/c. They are governed with the Income Tax Act. If you are doing some business then it is allowable but if your income is from other sources or capital gains or salary then it is not allowable as the professional fee paid is allowed only u/s 26 to 37 which relates to business income only.
You have not stated what type of income you are generating and whether you are eligible to claim the deduction or not.
CAclubindia
