2016 (5) TMI 523

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.... of disallowance of expenditure as capital expenditure for Rs. 11,60,000/- is incorrect, illegal, bad in law and is to be deleted. 2. The denial of amortization of capital expenditure is also bad in law and without natural justice. 2. At the outset it is necessary to mention that rest of the grounds challenging the notice issued u/s 142(1) have not been pressed before us, therefore dismissed. 3. Facts in brief as emerged from the corresponding assessment order passed u/s 143(3) dated 24th December, 2010 were that the assessee company is in the business of construction and development. In a cryptic manner the AO had made observation that in the "preliminary expenses" a payment was made to ROC to increase the authorized capital....

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....the circumstances of the case, the sum of Rs. 47,250/- paid as fees by the assessee to the Registrar of Companies for the enhancement of capital was an allowable revenue expenditure", has been answered in the negative and in favour of revenue. It is also found that the Apex Court has rendered its view in the matter in Punjab State Industrial Development Corporation Ltd. v CIT (1997) 225 ITR 792 (SC), holding that fee paid to Registrar of Companies for expansion of capital base of the company was directly related to the capital expenditure incurred the company and although incidentally that would certainly help in the business of the company and may also help in profit making, it still retains the character of a capital expenditure since the....

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....stamp duty for increase of authorized share capital as under :- 1. ROC Charges for increase of share capital Rs. 5,80,000/- on 07.01.2008 to increase authorized share capital from Rs. 10,00,00,000/- (Rs.10 Lacs to 10 Cr.) 2. ROC Charges for increases of Share capital Rs. 1,98,000/- on 01.01.2008 towards stamp duty charges for increase of share capital from Rs. 10 Lacs to 10 Cr. 3. Stamping Charges for Share Certificate issued Rs. 17,000/- 4. Stamping Charges for Share Certificate issued Rs. 1,95,000/- 5. Stamping Charges for Share Certificate issued Rs. 1,70,000/- Total Expenses for issue of Share (a) Fee paid ROC for increase of authorised share capital Rs. 7,78,000/- ....

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....aj Laxmi Stone Crusher [ITA No. 253(Del) of 2009] has held that the expenditure incurred for increase in share capital of company after commencement of a business, held to be a regular business expenditure of revenue nature. Likewise in the case of Loyal Textile Mills Ltd. [ IT Appeal No. 2704(Mad) of 1996 ] the expenditure was in respect of filing fee for increasing the authorized capital of the company paid to Registrar of Companies held as revenue expenditure. In the said decision, a decision of Hon'ble Supreme Court of Brook Bond India Ltd. 225 ITR 798 (SC) has been discussed. On this issue an another decision of the Hon'ble Supreme Court pronounced in the case of Punjab Industrial Development Corporation 225 ITR 792 has also been cited....