1982 (7) TMI 127

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....-2-1981 of the Commissioner (Appeals) relating to the assessment year 1977-78, the previous year of which ended 31-3-1977. 2. [This para is not reproduced here as it involves a minor issue.] 3. The only other ground in this appeal relates to the disallowance of a sum of Rs. 6,000. The assessee is a limited company. During the year under consideration, it spent a sum of Rs. 39,629 as legal an....

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....that the claim of the assessee should have been allowed. He relied on the decision of the Madras High Court in the case of CIT v. Kisenchand Chellaram (India) (P.) Ltd. [1981] 130 ITR 385. He drew our attention to the observations of the High Court at pages 391 and 392. He urged that the assessee did not get any enduring benefit out of these expenses. Shri A.R. Viswanathan, on the other hand, supp....

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....on record. We find that the case of Mohan Meakin is in favour of the department and this case has distinguished the earlier decision of the Supreme Court in the case of India Cements Ltd. v. CIT [1966] 60 ITR 52. On the other hand, the case of Kisenchand is in favour of the assessee, and this case also has considered the decision of the Supreme Court in the case of India Cements. Both these cases ....

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....l. The assessee had to issue bonus shares in order to improve the ratio between its capital and reserves, vis-a-vis its liabilities to third parties. In our opinion, this is an enduring benefit, because the benefit arising out of this improved picture of its capital structure, would be available to it for many future years. Again, the enduring benefit thus obtained, was obviously in the capital fi....