2002 (11) TMI 246

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....eing entrance fees paid to Association of Merchant Bankers of India holding it to be a capital expenditure. He ought to have held it as deductible expenditure. (3) The CIT(A) has erred in not deciding on merits the issue as regards the addition of Rs. 75,000 on the ground of alleged interest income." 2. The assessee is involved in the business of financiers and merchant bankers. The assessee paid Rs. 2,50,000 as fees to SEBI for registration as merchant banker. The payment was made on 18th Aug., 1993 whereas the registration was allowed by SEBI on 15th Sept., 1993. The AO observed that the registration expenses prior to commencement of business is a pre-commencement expenses and the assessee has created an asset as the registration al....

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....9 CTR (Guj) 416 : (2001) 251 ITR 61 (Guj). In this case, we also find that the assessee was already in business of financiers and merchant bankers. The fee was paid to SEBI for registration as merchant banker which amounts to expansion of existing business. So in view of ratio laid down in above decisions, the expenditure in question is of revenue nature and same should be allowed. 6. The next issue is against the entrance fees of Rs. 1,00,000 paid to Association of Merchant Bankers of India. The AO found that in addition to entrance fees, the assessee was required to pay annual subscription of Rs. 1,00,000 per annum. The AO considered the facts that by acquiring membership right of the cartel of AMBI, the assessee has drawn long-term be....