9911796707
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Issues involved:
1. Disallowance of claim under section 80G of the Income-tax Act, 1961 for a donation made to Vishwa Mangal Trust. 2. Disallowance of expenses representing statutory fee paid for raising authorized share capital and application fee paid for issue of bonus shares, and deletion of addition of export subsidy and duty drawback accrued but not shown in the profit and loss account. Issue 1 - Disallowance of claim under section 80G: The Tribunal upheld the disallowance of the claim under section 80G for a donation made to Vishwa Mangal Trust. The court referred to a previous judgment and concluded in favor of the Revenue. Issue 2 - Disallowance of expenses and addition of export subsidy: a. Statutory fee for raising authorized share capital: The court held that the expenditure incurred for raising authorized share capital is capital expenditure based on precedents and the change in the income-earning apparatus. b. Application fee for issue of bonus shares: Unlike raising authorized share capital, issuing bonus shares does not change the capital structure of the company. The court explained the consequences of issuing bonus shares and concluded that the application fee for bonus shares was not capital expenditure. c. Export subsidy and duty drawback: The court referred to a judgment in a different case to emphasize the importance of consistent accounting methods for receipts and payments, but found the circumstances in the present case justified the treatment of export subsidy separately. The court answered the questions as follows: - Issue 1 in R. A. No. 916/(Cal) of 1986 was answered in favor of the Revenue. - Issue 1 in R. A. No. 962/(Cal) of 1986: Disallowance of statutory fee was upheld as capital expenditure, while application fee for bonus shares was not considered capital expenditure. - Issue 2 in R. A. No. 962/(Cal) of 1986 was answered in favor of the assessee. No costs were awarded in this judgment.
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