1996 (1) TMI 45

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....curred by the assessee-company in connection with the issue of right shares to existing shareholders was capital in nature and not admissible as a deduction in computing the total income ?" The assessee is a public limited company engaged in the manufacturing and sale of electronic instruments, relays, fusegears, etc. During the relevant previous year for the assessment year 1967-68, the assessee issued equity shares to existing shareholders as rights shares. In connection with that the assessee spent Rs. 28,000 as fees paid to the share registrars and a further amount of Rs. 10,387 was paid to solicitors, Jardine Henderson Ltd., in connection with the raising of further capital for the company. The assessee claimed before the Income-tax....

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....nd, learned standing counsel for the Department, in support of his contention that the expenditure claimed is capital in nature, relied upon several decisions mentioned in page 673 under the caption "expenditure incurred in increasing the share capital, raising loans or issuing debentures" in the text book "The Law and Practice of Income Tax" by Kanga and Palkhivala (Eighth edition, Vol. I) and the decision reported in CIT v. Motor Industries Co. Ltd. [1988] 173 ITR 374 (Kar). We have heard learned counsel for the assessee as well as for the Department. In CIT v. Kisenchand Chellaram (India) P. Ltd. [1981] 130 ITR 385, this court while considering whether the assessee's claim for fees paid for raising capital of the company to the Regist....