TaxTMI 
TaxTMI 
2024 (10) TMI 522
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.... Commissioner of Income- tax(Appeals), Ahmedabad(hereinafter called "the CIT(A)") dated 11.07.2011 in Appeal No. CIT(A)-VIII/ACIT Rng-4/741/09-10 which in turn has arisen from the assessment order dated 21.12.2009 passed by ld. Assessing Office u/s 143(3) of the Income-tax Act, 1961(hereinafter called "the Act"). 2. The Revenue has raised following grounds of appeal in memo of appeal filed with the Income Tax Appellate Tribunal, Ahmedabad for assessment year 2007-08:- ITA No.2308/Ahd/2011 A.Y.2007-08 "1. The ld. CIT(A) has erred in law and on facts in deleting the addition made of Rs. 2,95,49,667/- u/s. 80IA(4) without appreciating the fact that the assessee did not fulfill the conditions precedent and the assessee was only a contractor not a developer. 2. On facts and in the circumstances of the case, the ld. CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent." 2b. The Assessee has raised following grounds in the Cross Objection filed with Income Tax Appellate Tribunal, for assessment....
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....arties. The work is of development and not a part of only construction activities. The assessee submitted that its work cannot be termed in the nature of work contract. The assessee submitted that the dictionary meaning of a developer is very exhaustive and the assessee falls in the category of developer, and there are no indications that the work of the assessee is in the nature of contractor. The assessee submitted before the AO that the consideration is paid by respective government authorities for executing infrastructure facility as a developer and not as a contractor. The assessee submitted before the AO that it has to undertake extensive liability which lasts till the tender document conditions. It was submitted by the assessee before the AO that as per the agreement, the assessee is not only developing the project but the assessee is also responsible for the maintenance of the developed work for which no separate consideration was paid. The assessee's liability does not cease on the completion of the project work, thus there is no reasons to consider nature of activity of the assessee as a contractor. 3.3 The AO rejected the contentions of the assessee vide assessment or....
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....ain Canal Ch.356.422 km immediately strictly in accordance with the contractual terms, conditions, specification & relevant drawing from time to time. The work shall have to be claimed out as per the tender stipulations and under instruction & direction of Engineer-in-charge & subject to the approval in all respect and responsible to the superintending Engineer, in all contracts matter & complete & said work " All the conditions related to employment of labours are also mentioned as "....you shall have to submit the necessary return certificate to Engineer-in- charge from time to time & shall not engage the labourers below age 15 & submit the indemnity bond for the strictly obey of labour lows " (Point C Sub Point 5). Extract from letter dated 26.10.2009 "....You have to fulfill the condition of deploying sufficient machinery & equipment on work for time bound completion, as stipulated in tender documents." " You will give the undertaking that not with standing of whatever submission made with the tender documents, you will deploy, all necessary & sufficient machineries, equipment & manpower etc. to complete the work within timeframe scheduled, w....
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....he activities undertaken by it at the part rate as agreed by in the tender and work contract & collected the payment for the same. g. The receipt of payment u/s. 194C itself clearly indicates that the assessee company has acted as a contractor not as a developer or owner of the project. h. The assessee failed to prove that investment, risk and reward is belonging to it for the development project, which is the basic requirement of the developer. However, the assessee has incurred the operative investment, and taken risk and reward for the execution of the work/civil contracts delegated to them through tender for the very well defined & planned activities. The major risk of development of the project is with the developer only. The assessee has no post completion responsibility neither related to the repair and maintenance nor related to it's supervision. The assessee is also not providing any kind of provision for this. It clearly shows that the risk and liability of the assessee is restricted up to the defective work done by him and the cost of only this default will be borne by him. i. Further from the perusal of the explanation below sec. 80IA (13)....
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....tional and genuine and hence withdrawn." 4. Aggrieved by the assessment framed by the AO, the assessee filed first appeal with ld. CIT(A), and the assessee claimed itself to be developer of infrastructure projects rather than being merely as construction contractor. The assessee submitted that the assessee being developer of infrastructure projects is eligible for deduction u/s 80IA(4), but the AO denied the deduction u/s 80IA on the grounds that the assessee is construction contractor undertaking work contracts. The main bone of contention of the assessee on merits of the issue is that the assessee is engaged in the business of developing Road, Bridges etc., i.e. the infrastructure facilities after entering into agreement with the State / Central Government, and hence the assessee has duly fulfilled the conditions as laid down in section 80IA(4)(i)(a) and (b) of the Act. The assessee claimed that it fulfilled all the necessary conditions to be eligible for deduction u/s 80IA, and the newly inserted explanation is not applicable to the assessee. It was also submitted that the newly inserted Explanation below section 80IA(13) by Finance Act, 2009 is directly contrary to the main ....
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....which are carried out at the sole risk of the assessee. It was submitted before ld. CIT(A) that it was not merely the construction of a particular infrastructure facility but developing the facility and hence developing the State. The assessee also referred to its financial statement and submitted that the assessee has made huge financial investments, human resources, technical expertise etc.. The assessee possesses its own technical knowledge of how to develop and lay roads, dams, bridges etc., and it has its own technical as well managerial pool of manpower for the same. The assessee has purchased and employed its own material for development of the infrastructure facility .Thus, the assessee submitted that the entire planning of the business as well as methodology of the executing the work has been done by the assessee and not by the Government authority. 4.2 The assessee claimed that department in the earlier years had accepted that the assessee is a developer and merely because Explanation is now inserted in the statute, the assessee on the same set of facts and with identical kind of business cannot be held to be not a developer and merely a work contractor . The assessee ....
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....lt plant and paver and other Road Machinery. 4 Indroda Ahmedabad Irrigation Construction of Work of Weir Across River 1214009 1640653 Sant Sarovar Department Sabarmati at lndroda Gandhinagar 5 Patan Kharti Sadar Sarovar Narmada Construction of Canal Syphon Across the River Khari II@ 99512262 8642915 Canal Nigam Ltd. CH 356.420 of Narmada Main Canal - The entire work done with Machinery like Batching Plant, Transit Mixers, Ropway etc 6 STP - Jashpur Capital Project Division Turnkey work including Designs & Construction 76 MLD 5711807 -4239557 Gujrat state Govt. Sewerage Treatment Plant Complete with Maintaining and Running the Plant for 3 years 7 MPRRDA- Madhya Pradesh Rural Road Constr....
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.... eligible for deduction u/s 80IA(4) of the Act. It was also submitted and explained to the Id. AO that the Appellant is working in the capacity of developer and not merely the construction contractor. However, the AO contended that the Appellant Company is not developer but merely a construction contractor and accordingly the AO withdrew the claim made u/s 80IA(4) of the Act and made addition of Rs. 2,95,49,667/- to the total income of the Appellant.. 2.3 Before, me the appellant submitted that it is engaged in the business of development of infrastructure facilities. The appellant has given an elaborate written submission in this regard. The Ld. A.R of the appellant strongly argued that in view of the factual and legal position as stated above, the appellant having fulfilled all the conditions prescribed under the Act, and it is legitimately entitled to the deduction u/s 80IA(4) of the Act even after the amended explanation introduced by the Finance (No.2) Act 2009. 2.3.1 The Ld. A.R. drew my attention towards the decision of the Hon'ble Rajkot ITAT in the case of M/S TARMAT BEL (JV.) KCL, RAJKOT V/S ITO in ITA No. 1111/ RJT/2010, delivered on 23/09/2010 on t....
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..... 9. Considering the totality of the facts on record as also the development of law concerning the granting of deductions from gross total income, we are of the considered view that the appellant is entitled to deduction u/s. 80IA(4) of the Act as it has been found to have fulfilled all conditions of eligibility. Accordingly, we direct that the deduction as claimed be allowed. In the result, both the grounds of appeal are allowed", The ITAT had in that case categorically held that the explanation does not in any way create artificial fiction about the nature of the business undertaking, but it only states that no deduction shall be admissible in the case where an assessee carries on the business in the nature of subcontract. In the present case of the appellant it is an undisputed fact that it is an undertaking engaged in development of infrastructure facilities on its own. It is not a subcontractor. The ratio of the said judgment is squarely applicable to the appellant's case. It is significant to mention here that the ITAT in the above case, had considered the judgment of the ITAT Mumbai bench in the case of B.T. PATIL & SONS Belgaum Constr....
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...., the AO is directed to allow the deduction u/s 80IA(4) in respect of the income derived by the appellant from the units eligible for such deduction. 2. M/s. Aquafill Polymers Co. Pvt. Ltd. In Appeal No.CIT(A)-VI/ITO-1/2304/09-10 Honorable ITAT held that if assessee assumes the risk of project, plan the project work, employ technical skills, mobilize people, funds and resources then assessee cannot be denied the deduction from the profit of developing infrastructure. Appellant's case is identical since, in respect of these three projects appellant designed the infrastructure projects, took risk of the project, commissioned the project and conducted trial run, deployed its own resources. In the light of these facts appellant cannot be termed as mere contractor. Since appellant perform all those tasks which is performed by a developer, appellant cannot be denied the benefit available to the developer. All the arguments of the assessing officer have been met by the appellant in detailed submissions quoted earlier. Respectfully following the recent decision of IT AT Rajkot bench which squarely applies to the facts of the appellant's case, assessing of....
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....f interest income for deduction". "2.3.3 The appellant also stated that in the recent decision of Laxmi Civil Engineering (Pvt) Ltd. Vs. ACIT, the Hon'ble ITAT, Pune in ITA No. 766/PN/09, 254/PN/ 08, 431 /PN/07 and 435/PN/07 dated 8.6.2011 decided the case in favour of the appellant on similar set of facts. 2.3.4 I have carefully considered the entire facts and material available on record in this regard and various legal citations. The Ld. A.R. strongly argued that in view of the decision of Hon'ble Rajkot ITAT in the case of M/s. Tarmat Bel (JV)KCL, Rajkot v/s. ITO which is almost on the similar facts, the claim of the appellant u/s.80IA(4) should be allowed. I have also gone through the appellate orders of other CIT(Appeals) in this regard. It is observed that the Hon'ble ITAT Rajkot held that if assessee assumes the risk of project, plan the project work, employ technical skills, mobilize people, funds and resources then assessee cannot be denied the deduction u/s. 80IA(4) for the eligible projects of developing infrastructure. The appellant in his elaborate submission demonstrated and established that they are complying with all the terms and cond....
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....lanation inserted after sub-section (13) of Section 80IA, and keeping in view the aforesaid explanation the assessee is a work contractor as the assessee is executing a work contract, and hence the assessee is not eligible for deduction u/s 80IA. The ld. Sr. DR, Shri Chetram Meena reiterated that the assessee is not a developer and is a work contractor, and hence the AO has rightly denied deduction u/s 80IA to the assessee. The ld. Sr. DR, Shri Chetram Meena relied upon the assessment order passed by the AO. 5.2 On the other hand, the Ld. Sr. Advocate Shri S.N. Soparkar submitted that the assessee is a developer and not merely a work-contractor. The assessee is eligible and entitled for deduction under section 80IA(4). The ld. Sr. Advocate, Shri S.N. Soparkar relied upon the order dated 28.06.2023 of ITAT, Ahmedabad in ACIT v. Monte Carlo Construction Limited in ITA No. 1892/Ahd/2013 & Ors., and also judgment and order of Hon'ble Gujarat High Court in the case of The PCIT v. MonteCarlo Construction Ltd. in R/Tax No. 786 of 2023, dated 19.12.2023, and submitted that the issue is covered by the aforesaid judgment and order of Hon'ble Gujarat High Court, and the assessee is entitle....
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....aming scrutiny assessment u/s 143(3) read with Section 143(2) of the 1961 Act. The AO has observed that the assessee is engaged in the business of Construction. The assessee claimed that it is a developer engaged in the infrastructure activities being road development of airport terminal plant, development of Airport Terminal Building, Canal Syphone Work, Diaphram Wall etc. with State or Central Government, and having duly complied with the conditions stipulated u/s 80IA(4) of the 1961 Act . The assessee claimed that is eligible for deduction u/s 80IA(4). The AO denied the deduction u/s 80IA(4) on the grounds that the assessee is not a 'Developer' but a 'Contractor' who is executing work contract, and is hit by newly inserted Explanation below Section 80IA(13) of the 1961 Act which was inserted by Finance Act, 2007 effective from 01.04.2000, and hence the assessee is not eligible for deduction u/s 80IA(4). The AO observed that the assessee has entered into an agreement with various government agencies, The assessee is not owner of the work done by him and the real ownership lies with various government authorities. The assessee has not derived income from developing or operating an....
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.... (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park ^34[or develops ^35[***] a special economic zone referred to in clause (iii) of sub-section (4)] or generates power or commences transmission or distribution of power ^36[or undertakes substantial renovation and modernisation of the existing transmission or distribution lines ^37[^37a[or lays and begins to operate a cross-country natural gas distribution network]]] : ^38[Provided that where the assessee develops or operates and maintains or develops, operates and maintains any infrastructure facility referred to in clause (a) or clause (b) or clause (c) of the Explanation to clause (i) of sub-section (4), the provisions of this sub-section shall have effect as if for the words "fifteen years", the words "twenty years" had been substituted.] ^39[(2A) Notwithstanding anything contained in sub-sectio....
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....chinery or plant by the assessee. Explanation 2.-Where in the case of an ^46[undertaking], any machinery or plant or any part thereof previously used for any purpose is transferred to a new business and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (ii) of this sub-section, the condition specified therein shall be deemed to have been complied with. (4) This section applies to- (i) any enterprise carrying on the business ^47[of (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining] any infrastructure facility which fulfils all the following conditions, namely :- (a) it is owned by a company registered in India or by a consortium of such companies ^48[or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act;] ^49[(b) it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for (i)developing or (ii)operating and ....
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....t Government for the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 58[2006]: ^59[Provided that in a case where an undertaking develops an industrial park on or after the 1st day of April, 1999 or a special economic zone on or after the 1st day of April, 2001 and transfers the operation and maintenance of such industrial park or such special economic zone, as the case may be, to another undertaking (hereafter in this section referred to as the transferee undertaking), the deduction under sub-section (1) shall be allowed to such transferee undertaking for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee undertaking : ^60[Provided further that in the case of any undertaking which develops, develops and operates or maintains and operates an industrial park, the provisions of this clause shall have effect as if for the figures, letters and words "31st day of March, 2006", the figures, letters and words "31st day of March, ^60a[2011]" had been substituted;] (iv) an ^61[undertaking] which,- (a) is set up in any part of India fo....
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....d Natural Gas Regulatory Board established under sub-section (1) of section 3 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (19 of 2006) and notified by the Central Government in the Official Gazette; (c) one-third of its total pipeline capacity is available for use on common carrier basis by any person other than the assessee or an associated person; (d) it has started or starts operating on or after the 1st day of April, 2007; and (e) any other condition which may be prescribed. Explanation.-For the purposes of this clause, an "associated person" in relation to the assessee means a person- (i) who participates directly or indirectly or through one or more intermediaries in the management or control or capital of the assessee; (ii) who holds, directly or indirectly, shares carrying not less than twenty-six per cent of the voting power in the assessee; (iii) who appoints more than half of the Board of directors or members of the governing board, or one or more executive directors or executive members of the governing board of the assessee; or (iv) who guarantees not less than ten per cent of the t....
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....as on the date of the transfer, then, for the purposes of the deduction under this section, the profits and gains of such eligible business shall be computed as if the transfer, in either case, had been made at the market value of such goods ^74[or services] as on that date : Provided that where, in the opinion of the Assessing Officer, the computation of the profits and gains of the eligible business in the manner hereinbefore specified presents exceptional difficulties, the Assessing Officer may compute such profits and gains on such reasonable basis as he may deem fit. ^75[Explanation.-For the purposes of this sub-section, "market value", in relation to any goods or services, means the price that such goods or services would ordinarily fetch in the open market.] (9) Where any amount of profits and gains of an ^76[undertaking]or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C.-Deductions in respect of certain incomes", and shall in no case exceed the profits ....
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....ature of a works contract awarded by any person (including the Central or State Government) and executed by the undertaking or enterprise referred to in sub-section (1).] Thus, as could be seen that so far as infrastructure facilities is concerned, Section 80IA(4), inter-alia, provides that deduction shall be allowed where the total income of an assesses includes any profits and gains derived by an undertaking or an enterprise from any eligible business, at such rates as specified in the section where the assessee develops or operates and maintains or develops, operate and maintain any infrastructure facility. The enterprise carrying on the business of (i) developing or (ii) operating and maintaining or(iii) developing, operating or maintaining any infrastructure facility which fulfills all the following conditions i.e. it is owned by a Company registered in India or by consortium of such companies or by an authority or a board or a corporation of any other body established or constituted under any Central or State Act, it has entered into an agreement with Central or State Government or a local authority or any other statutory body, it has started or starts operating and mainta....
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...., Contractor act as an agent for the Contractee . While developer is broader than contractor, wherein developer is given contract for developing new infrastructure facility, wherein the Developer will act as principal. The Developer will actively participate in designing the new infrastructure facility, deploying its own financial stake/investment in development, deploying of its own men, material and machine to develop the facility/project. The developer will take charge of the existing premises/land and then complete the development as per the terms of the Contract. The developer will use its expertise and experience to develop infrastructure facility including deploying of managerial personnel's. The role and responsibility of the person who are awarded work of development does not end with completion of the work and he continues to be responsible even after completion of the work. The developer will be subjected to penal provisions for breach of any provisions of the terms of the contract. The developer shall be liable to recompense for any loss caused to the person awarding the contract for failure to adhere to various laws such as Environmental laws, Labour Laws etc. Thus, as....
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....ns(supra), the ITAT has discussed the parameters distinguishing between Contractor as well Developer by analysing the specific work under taken by the tax-payer. While in the instant case before us, we have observed that the AO denied the deduction u/s 80IA(4) by holding assessee to be contractor and hit by newly inserted explanation below Section 80IA(13), but while granting relief to the assessee, the ld. CIT(A) did not discuss elaborately about the eligibility or otherwise of the assessee to the deduction u/s 80IA(4) vis-à-vis specific work orders executed by the assessee during the year under consideration . The ld. CIT(A) has made general and balled observations while granting deduction to the assessee u/s 80IA(4), which general and balled observations are not sufficient to hold in favour of the assessee. We could have decided the issue ourselves as these appeals are old appeal pending for last more than 12 years, but the material filed before us vide paper books are not sufficient for us to decide the issue . Even tender documents, agreements with the Government for executing the work, PERT chart, financial statements, Men, material and machines deployed, the roles and....
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.... and on facts in deleting the addition of Rs. 1,67,41,257/- made on account of disallowance of deduction u/s 80IA(4) without appreciating the fact that the assessee did not fulfill the conditions precedent and the assessee was only a contractor not a developer. 2. On the facts and in the circumstances of the case, the ld. CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent." 10. The issue raised by Revenue in its appeal filed with ITAT in ITA No. 2352/Ahd/2011 is concerning the claim of deduction under section 80IA(4) of the Act which was denied by the AO but later allowed by the ld. CIT(A) . Similar issue arose in assessment year 2007-08 in Revenue's appeal, and even grounds of appeal are similar. Our decision in ITA No. 2308/Ahd/2011 for assessment year 2007-08 as adjudicated above in preceding para of this order shall apply mutatis mutandis to the appeal of the Revenue for assessment year 2008-09 on this issue. Thus, this issue is restored back to the file of the ld. CIT(A) for fresh adjudication with....
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....sed. After hearing both the parties. CO No.210/Ahd/2011 for assessment year 2008-09 arising out of ITA no. 2352/Ahd/2011 stands dismissed. We order accordingly. 13. The assessee has raised following grounds of appeal in memo of Appeal listed as Appeal No. 2357/Ahd./2011 for assessment year 2008-09, filed with the Income Tax Appellate Tribunal, Ahmedabad, for assessment year 2008-09:- Grounds of Appeal raised by Assessee in Appeal in ITA no. 2357/Ahd/2011 for assessment year 2008-09. "1. The learned Commissioner of Appeal erred in law and on the facts of the case in confirming the disallowance to the extent of Rs. 66,86,461 made by the Assessing officer u/s 14A r. w. rule 8D of the Income Tax Act, 1961. 2. The learned Commissioner of Appeal erred in law and on the facts of the case in confirming the addition to the extent of Rs. 1,25,194 out of claim of Rs. 13,40,328 u/s 35 D of the income Tax Act, 1961. 3. The appellant crave leave to add, alter, edit, delete, modify, change or amend all or any of the grounds of appeal at the time or before the hearing of the appeal." 13.2 The issue involved in this appeal filed by the assessee is concerning the ....
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....is only 13.2 cr and investments have increased by 13.6 cr. Thus, the assessee has utilized interest bearing funds for earning exempt income. The AO observed that the interest bearing funds have been utilized for earning exempt income. The interest free funds have increased by 11 cr. but loans and advances given by the assessee has increased by 18.6 cr. . The AO observed that the assessee has utilized interest bearing funds for earning exempt income and the interest free funds are not enough to finance the various additions to assets. The AO observed that the assessee is not able to prove the nexus between interest free funds and exempt income. The AO made addition to the tune of Rs. 85,12,705/- to the income of the assessee under section 14A r.w.r. 8D, details of the same are as under:- Thus the computation of the expanding incurred in relation to earning dividend income as per the provisions of section 14A of the act in the manner as prescribed under Rule 8D of the Act is as under:- Rule 8D (2)(i) The amount of expenditure directly relating to income which does not from part of total income NIL Rule 8....
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....interest expenditure by invoking Section 14A read with Rule 8D are warranted. While ld. DR supported the orders of the authorities below. 13.5 We have considered rival contentions and perused the material on record. We have observed that the assessee has earned exempt income to the tune of Rs. 13,118/- from dividend income from UBI and Rs. 9,01,43,693/- from Joint Ventures. The AO has invoked Section 14A read with Rule 8D, to make disallowance of Rs. 76,15,655/- u/s 14A read with Rule 8D(2)(b) and Rs. 8,97,050/- u/s 14A read with Rule 8D(2)(c). The ld. CIT(A) partially confirmed the additions by excluding bank guarantee commission, legal/stamp duty charges and bank charges which were added by the AO in the interest expenses . We have observed that the assessee has owned interest free funds available to the tune of Rs. 56,70,74,310/-, by way of share capital to the tune of Rs. 10,78,14,000/- and Reserves and Surplus to the tune of Rs. 45,92,60,310/-. The average funds invested by the assessee in securities/JV yielding exempt income were to the tune of Rs. 17,94,09,849/-, while the owned interest free funds are much higher at Rs. 56,70,74,310/-. Thus, presumption will apply that t....
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....rst appeal before the ld. CIT(A) challenging the additions as were made by the AO. The ld. CIT(A) observed that partly expenses were incurred for public issue and the assessee has claimed deduction u/s 35D to the tune of 20%, which the assessee is entitled to claim deduction which stood allowed by ld. CIT(A). However, so far expenses to the tune of Rs. 6,25,967/- claimed to be incurred for increase in authorized capital is concerned, the ld. ld. CIT(A) observed that the assessee has not filed details for Rs. 6,25,967/- and these expenses are hit by decision of Hon'ble Supreme Court in the case of Brooke Bond(supra). The assessee having claimed 20% of the total expenses of Rs. 6,25,967/- as preliminary expenses in the year under consideration, stood disallowed by ld CIT(A) to the tune of Rs. 1,25,194/- . 14.3 Aggrieved by the decision of ld. CIT(A), the assessee has filed an appeal with ITAT. The ld. Senior Advocate Shri S N Soparkar submitted that regarding disallowance u/s 35D, if the ITAT confirms the additions, then the deduction u/s 80IA(4) will go up. It was submitted by ld. DR that the AO has disallowed the expenses being incurred for increase in authorized capital which a....