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Issues:
Disallowance of share issue expenses and consultancy charges as revenue expenditure for assessment year 1995-96. Analysis: The appeal was filed against the order of the CIT(A)-V, Hyderabad, for the assessment year 1995-96. The main ground pressed was the disallowance of share issue expenses and consultancy charges as revenue expenditure. The assessee incurred expenses for a public issue but ultimately decided not to proceed. The total expenditure of Rs. 1,55,190 was considered abortive. The assessee claimed it as revenue expenditure or allowable under section 35D of the Act. The counsel for the assessee conceded that the assessee was not eligible for deduction under section 35 and argued that the expenditure should be allowed as revenue expenditure. The Revenue contended that any expenditure related to an increase in the capital base should be considered capital expenditure, citing relevant case law. The Revenue emphasized that the object of the expenditure, not its end result, determines its nature. The Tribunal agreed with the Revenue's position, stating that even abortive capital expenditure must be disallowed. The Tribunal rejected the argument that the expenditure's character changes based on the end result, citing legal commentary and case law supporting the Revenue's stance. Ultimately, the Tribunal upheld the Revenue's decision to disallow the expenses as revenue expenditure. No other grounds raised in the appeal were pressed during the hearing, leading to their rejection. Consequently, the assessee's appeal was dismissed.
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