TaxTMI 
TaxTMI 
2013 (6) TMI 19
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....are that the assessee company, in the relevant year, was engaged in manufacturing of motorized two wheelers and auto components/spare parts for auto industries. It had filed its return of income declaring loss of Rs. 37,11,83,633/- . The assessment was completed at a total loss of Rs. 34,94,41,949/, inter alia, after making following addition/disallowance: Disallowance of Rs. 37,50,5000/- being fees paid to ROC for increase in authorized share capital. . 4. Ld. CIT(A) upheld the disallowance to the extent of Rs. 30,18,293/- and allowed a relief of Rs. 7,31,707/-. Before ld. CIT(A) the assessee had also taken following ground of appeal: "That the Ld. DCIT has failed to allow the amount at Rs. 3,17,016/- disallowed in the computation....
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.... provident fund, without appreciating the fact that the claim for such deduction was not made in the return filed by the assessee, nor the same was made through any revised return filed by the assessee, and, therefore, the deduction was not allowable in terms of the Hon'ble Supreme Court's judgement in the case of Goetze India Ltd. vs CIT (284 ITR 323)." 6. Brief facts apropos ground No. 1 are that assessee had deposited a sum of Rs. 37,50,5000/- on account of fees paid to ROC for increase in authorized share capital. After considering the assessee's reply, the assessing officer held that the expenses were capital in nature. He relied on the decision of the Hon'ble Supreme Court in the case of Punjab State Industrial Development Corporat....
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....ed capital for which a sum of Rs. 37,50,500/- was paid to ROC as fee for increase in authorized share capital. Thus, in sum and substance, the assessee made the following submissions:- 1. There was no flow of additional funds to the company on account of increase in Equity capital. 2. The above exercise had not resulted in availability of any additional funds in the hands of the company. 3. It was a mere re-allocation of existing funds. 9. The assessee relied on the decision of Hon'ble Supreme Court in the case of CIT v/s. General Insurance Corporation 286 ITR 232 (SC), wherein it had been held that expenses by way of stamp duty and registration for issue of bonus share was revenue in expenditure. 10. Ld. CIT(A) noted that pu....
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....preme Court's decision in the case of CIT vs. General Insurance Corporation 286 ITR 232 (SC) was applicable. However, as regards the balance of Rs. 26.50 crores he found the same had actually been received in cash through actual inflow of funds pursuant to increase in the preference capital. He, therefore, relying on the Supreme Court's decision in the case of Punjab State Industrial Development Corporation Ltd. vs. CIT 225 ITR 793 (SC) (supra) and Brooke Bond India Ltd vs. CIT 225 ITR 798 (SC) (Supra) held that proportionate ROC fees and other related expenses on account of increase of share capital by way of fresh infusion of share capital to the extent of Rs. 49.50 is to be treated as capital. He, accordingly, upheld the disallowance to ....
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....ble in view of the decision of the Hon'ble Supreme Court in the case of the Goetze India Ltd (Supra) is misplaced because this decision does not put any embargo on the powers of appellate authority to allow a legally admissible claim. 16. In the result this ground is dismissed. 17. In the result the departmental appeal is dismissed. 18. Now we will take the appeal for the assessment year 2008-09 vide ITA No. 2920/Del/2012. 19. The assessing officer observed that the assessee company was incurring heavy losses for past several years. He noted that assessee had been borrowing huge amounts of funds steadily for purpose of its business. At the same time it had advanced an amount of Rs. 5,06,12,209/-to one of its related concern M/s.....