TaxTMI 
TaxTMI 
2005 (8) TMI 56
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....ng fees paid to the Registrar of Companies for increasing the authorised capital of the company for the purpose of issuing bonus shares, based on the decision of the hon'ble Bombay High Court in the case of Bombay Burmah Trading Corporation Ltd. v. CIT [1984] 145 ITR 793, ignoring the decision of the hon'ble Supreme Court in the case of Punjab State Industrial Development Corporation Ltd. v. CIT [1997] 225 ITR 792? III. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in directing to grant the depreciation of Rs. 76,368 totally ignoring Explanation 8 to section 43(1) of the Income-tax Act?" As regards the substantial question of law No. I, learned counsel for the Revenue fairly conceded that in view of the decision of this court in the case of CIT v. Sesa Goa Ltd. [2004] 266 ITR 126, he does not have anything to say and as per the said decision, the said question has to be decided against the Revenue and in favour of the assessee. In the case of CIT v. Sesa Goa Ltd. [2004] 266 ITR 126 (Bom), the Division Bench considered the judgment of the apex court in the case of CIT v. N. C. Budharaja and Co. [1993] 204 ITR 412....
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....d amount to manufacture relying on an earlier judgment in the case of CIT v. Mysore Minerals Ltd. [1994] 205 ITR 461 (Karn). The criticism against this judgment is that this judgment relied upon an earlier judgment in the case of Mysore Minerals, which has been reversed by the apex court in CIT v. Mysore Minerals Ltd. [2001] 247 ITR 301, and as such would no longer be a good law. Considering that aspect, we do not propose to consider the ratio of the said judgment. The next judgment relied upon is Deputy CIT v. Mysore Minerals Ltd. [2001] 250 ITR 730 (Karn). In this case also what was involved was mining of granite. The learned Division Bench of the Karnataka High Court relied upon the judgment in CIT v. N.C. Budharaja and Co. [1993] 204 ITR 412 (SC) and explained and distinguished it. In that case the process involved extracting granite and converting it into slabs, cutting and polishing them. This was held to be a manufacturing activity. In CIT v. Mysore Minerals Ltd. (No. 2) [2001] 250 ITR 728 (Karn), again the matter involved granite. The Division Bench observed that it stands concluded in view of the judgment in CIT v. Mysore Mineral Ltd. [2001] 250 ITR 725 (Karn). Therefore, ....
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....r thing produced. The argument was then noted that the contention of the Revenue that coal which is extracted from the mine is not an article or thing. What was contended is that winning or excavating coal is not an activity of production. The learned Division Bench then relied on the judgment in the case of CIT v. N.C. Budharaja and Co. [1993] 204 ITR 412 (SC) and also placing reliance on Webster's New International Dictionary, for the word 'produce', which is defined to mean 'something that is brought forth or yielded either naturally or as a result of effort and work'. In Shorter Oxford English Dictionary, the meaning given is: 'To bring forward, bring forth or out; to bring into being or existence'. In Black's Law Dictionary, the expression 'produce' is 'To bring forward; to show or exhibit; to bring into view or notice; to bring to the surface'. Considering the language used and also placing reliance on the provisions of section 35E of the Income-tax Act, the learned Division Bench noted that 'production of mineral' is used in the allied provisions of the Act itself and it is a definite point that Parliament employed the expression 'production' to the minerals extracted from u....
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....ction of ore would not amount to "production". The assessee, was therefore, entitled for deduction on account of investment allowance. As regards the substantial question of law No. II, learned counsel for the Revenue heavily relied upon the judgment of the Supreme Court in the case of Punjab State Industrial Development Corporation Ltd. v. CIT [1997] 225 ITR 792. In that case, the question before the apex court was whether the amount of fee paid to the Registrar of Companies as filing fee for enhancement of capital was not revenue expenditure? The Supreme Court noticed the conflict of opinions amongst various High Courts and on examination of these issues held that the fee paid to the Registrar for expansion of the capital base of the company was directly related to the capital expenditure incurred by 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 expenditure was directly related to the expansion of the capital base of the company. It may be noticed here that the Supreme Court in Punjab State Industrial Development Corporation Ltd....