TaxTMI 
TaxTMI 
2002 (5) TMI 216
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....d consultancy charges of Rs. 1,25,000 incurred by the assessee as revenue expenditure in nature and allowable as deduction." 3. Assessee wanted to go in for a public issue and incurred inter alia the following expenditure- "Details of Public Issue Promotion Expenses ------------------------------------------------------------------------------------- S. No. Date Amount Particulars of Payment ------------------------------------------------------------------------------------- 1. 20-1-1995 5,000.00 Cheque No. 093370 paid for Ad....
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....; Consultancy Services P. Ltd. 2. 16-11-1994 25,000.00 DD No. 072.105 paid to Vidharbha Holdings P. Ltd." ---------- 1,25,000.00 ------------------------------------------------------------------------------------- 4. It has been explained before us that the expenditure of Rs. 5,000 incurred on 20-1-1995 was for booking a lawn for holding a meeti....
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.... incurred in connection with the issue of shares, where there was an increase in capital base. His contention is that the said decision cannot be roped in by the Revenue in a case where public issue was simply contemplated, but the same did not materialise. He mentioned that any expenditure incurred in the nature of expansion of business has to be allowed in the light of the decision of the Apex Court in the case of Alembic Chemical Works Co. Ltd. v. CIT [1989] 177 ITR 377, wherein it was held that expenditure incurred for improvement of the operations of the existing business was allowable as revenue expenditure. In other words, it is contended that as no new or fresh venture is involved, and as there was no increase in the capital base, t....
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.... should have that result; it is the object, alone that counts. Thus, expenditure incurred in attempting to get a licence for trade though no licence is issued or to secure in agency or the continuance of the sole agency of a business, though no such agency is secured or to remunerate an architect in respect of services from drawing up the report of a project which is later abandoned, or expenditure for boring tubewell which was eventually found useless since the water obtained therefrom was found unsuitable is nevertheless of a capital nature...." In the light of the above remarks of the learned author and the case-law given by him as footnotes to the above remarks, we are of the view that even abortive capital expenditure has to be disa....