TaxTMI 
TaxTMI 
2019 (1) TMI 2082
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....ss of supply and trading of construction material, construction machinery and other goods for infrastructure, real estate and power sector, filed its return of income for the AY 2012-13 on 27/09//2012 admitting a total income of Rs. 2,06,11,350/-, which was processed u/s 143(1) of the Income-tax Act, 1961 (in short 'the Act'). Subsequently, the case was selected for scrutiny and accordingly, notices were issued. In response to the notices, the AR of the assessee filed the information and after going through the information, the AO completed the assessment by adding Rs. 1,56,11,181/- towards disallowance of expenditure u/s 14A Rs. 22,20,400/- towards disallowance of preliminary expenses written off u/s 35D and Rs. 2,49,253/- towards disallow....
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....oner of Income Tax (Appeals) is erroneous both on facts and in law and it is prejudicial to the interest of the assessee. The Ld. CIT(A) ought to have allowed the appeal of the appellant in full. 2. The Ld. CIT (A) erred in disallowing an amount of Rs. 22,20,400/- claimed by the appellant as deduction towards preliminary expenses u/s 35D of the Income tax act, 1961 without appreciating the facts of the case and legal provisions. merely stating that the reasons are explained by the AO and there is no provision in the Act to allow expenses in relation to fees paid to ROC for increase of authorised share capital of the company. 3. The Ld. CIT(A) erred in not adjudicating ground No. 7 of the appellant and written submissions m....
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....he decision of the coordinate bench of this Tribunal in the case of Prathista Industries Ltd. in ITA No. 1302/Hyd/2015 deleted the disallowance made by the AO u/s 14A of the Act. 7. Considered the rival submissions and perused the material on record. It is settled position of law that the provisions of section 14A can be applied to quantify the expenses in relation to exempt income. Since the exempt income is Nil, section 14A will not apply. The Rule 8D can be applied only when there is difficulty in finding the expenditure relating to exempt income. The provisions of section 14A and Rule 8D will not apply to the present case. 8. As regards ground No. 4 raised by the revenue regarding disallowance of interest paid towards late payment....
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....at interest on TDS is not interest paid on income tax per se. The same is in the nature of compensation and not as penal. Therefore, the ground raised by the revenue in this regard is dismissed. 12. As regards grounds raised by the assessee from 1 to 5 with regard disallowance of Rs. 22,20,400/- made u/s 35D of the Act, the AO observed that on verification of the submissions and expenditure debited to P&L A/c, the assessee claimed in the computation of income an amount of Rs. 22,20,400/- (1/5th of Rs. 1,11,02,000 incurred towards ROC fee expenditure) as deduction u/s 35D. 12.1 Referring to the provisions of Section 35D of the Act., the AO observed that ROC fee expenditure incurred towards increase in authorized share capital incurred ....
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....jected the assessee's contention of allowability of ROC fees as revenue expenditure. However, it has accepted that it is allowable u/s 35D(2)(c)(iv) of the Act. The relevant ratio of the case is reproduced as under: 7. Learned counsel for the assessee urged for making reference of the aforesaid question to a larger Bench. We do not, however, consider it necessary to do so. The Rajasthan High Court decision in the case of Aditya Mills [1990] 181 ITR 195 is clear and explicit on the point and we are bound by the same. We, consequently, answer the first question in the negative by saying that the fee paid to the Registrar of Companies for raising the authorised capital was not allowable as revenue expenditure, 8. Coming to th....
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....To us, it appears that even if the provision of Sub-section (2)(c)(iii). of Section 35D is not applicable, the language of Subsection (2)(c)(iv) of Section 35D is wide in nature and would include the deductibility of fee paid by the assessee to the Registrar for enhancement of capital. Therefore, the said provision was rightly applied to the present case by the Income-tax Appellate Tribunal. 10. Under these provisions, deduction of expenditure incurred for registration is to be spread over a period of ten years and is not allowable in the year in which the expenses are incurred. To uphold the submission of the Revenue that expenditure incurred for obtaining registration would not be allowable either under Subsection (2)(c)(iii) or ....