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2015 (4) TMI 596 - ITAT DELHIPenalty u/s 271 (1)(c) - Expenditure incurred on filing fee - ROC which was with respect to increase in authorized share capital of the assessee company disallowed - Held that:- To claim that such expenditure is allowable, assessee is relying upon the commentary of Iyengar’s Law of Income Tax 11th Edition, but a clear reading of the aforementioned commentary will reveal that no specific view has been formed by the Apex Court in the case of Brooke Bond Indian Ltd Vs. CIT (1997 (2) TMI 11 - SUPREME Court) regarding allowability of such claim that if there is increase in working funds then such expenditure could be allowed. However, in the case of Punjab State Industrial Development Corporation Ltd. Vs. CIT (1996 (12) TMI 6 - SUPREME Court), this issue has been considered and it has been observed that the fee paid to Registrar for expansion of capital base of the company was directly related to the capital expenditure incurred by company and although incidentally that would certainly help in business of company and may also help in profit making, it still retains the character of capital expenditure, since the expenditure was directly related to the expansion of capital base of the company. Thus, there was no doubt on the issue that even when there is increase in the capital for the business of the company then also the expenditure would be capital in nature and cannot be claimed as revenue expenditure. Therefore, clear-cut law has been laid down by Hon’ble Apex Court that such expenditure cannot be claimed as revenue expenditure. Thus when prima facie, a wrong claim is made, which is not only against two decisions of Apex Court i.e. in the cases of Brooke Bond India Ltd. (supra) and Punjab State Industrial Corporation Ltd. (supra), but also against the decision of Hon’ble Delhi High Court in the case of CIT Vs. Hindustan Insecticides (2001 (2) TMI 75 - DELHI High Court) then it will be a case of claiming expenditure, which is not permissible in law and assessee’s explanation cannot be considered to be bona fide or substantiated. CIT(A) did not commit any error in sustaining the concealment penalty. - Decided against assessee.
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