TaxTMI 
TaxTMI 
2003 (11) TMI 42
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....owed the said expenditure holding the same to be capital expenditure. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who by order dated December 30, 1991, remanded the matter with a direction to examine the order of the Controller of Capital Issues in respect of the said public issue. The Assessing Officer by his fresh order dated July 30, 1992, again held that the expenses were capital in nature. Further appeal was preferred by the assessee before the Commissioner of Income-tax (Appeals) and therein it was held that the expenses so incurred were revenue expenditure and, therefore, addition made by the Assessing Officer to the extent of Rs. 9,25,624 treating the same as capital expenditure was directed to....
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....rooke Bond India Ltd. [1997] 225 ITR 798 particularly on the following finding: "It is no doubt true that before the Appellate Assistant Commissioner as well as before the Tribunal it was submitted on behalf of the assessee that the increase in the capital was to meet the need for working funds for the assessee-company. But the statement of case sent by the Tribunal does not indicate that a finding was recorded to the effect that the expansion of the capital was undertaken by the assessee in order to meet the need for more working funds for the assessee. We, therefore, cannot proceed on the basis that the expansion of the capital was undertaken by the assessee for the purpose of meeting the need for working funds for the assessee to carry ....
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....re has to be treated as capital expenditure holding the assessee entitled to deletion of the said amount as decided by the Commissioner of Income-tax (Appeals). Mr. Mallick, learned counsel for the Revenue, contended that the expenditure for public issue of shares to increase capital, is capital expenditure and has been so held consistently by courts of law. The case of Brooke Bond India Ltd. v. CIT which was decided by the Calcutta High Court and reported in [1983] 140 ITR 272, the said aspect was clearly decided by observing as follows: "In our opinion, where the object of incurring the expenditure, as in the instant case, was to affect the capital structure, as a result of which certain incidental advantage flows, it will be of a capit....
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....xpenditure for issue of shares for increase in capital, it has been decided in the cases of Punjab State Industrial Development Corporation Ltd. [1997] 225 ITR 792 (SC) and Brooke Bond India Ltd. [1997] 225 ITR 798 (SC) that the same is capital expenditure and is not allowable. The contention of the assessee is that in the case of Brooke Bond India Ltd. [1997] 225 ITR 798, the apex court considered the aspect that if the expansion of capital was undertaken by the assessee in order to meet the need for more working funds, then the position would be otherwise, requires consideration as in the said judgment it was recorded that the statement of case sent by the Tribunal did not indicate that a finding was recorded to the effect that the expans....