2019 (5) TMI 184 - AT - Income Tax

Rectification u/s 254 - Fees paid to ROC - nature of expenditure - revenue or capital expenditure - as per ITAT it is a capital expenditure in nature and hence cannot be allowed as an allowable deduction - as per assessee ROC fees paid for increase in share was disallowed at the time of filing of return of income and hence prayed for suitable rectification - HELD THAT - Tribunal has observed CIT(A) has rightly held that ROC fees paid for increase in authorized share capital of a company is a capital expenditure in nature and hence cannot be allowed as an allowable deduction. Thus, we find no reason to interfere with the order passed by the ld. CIT(A) on this issue and accordingly, the ground raised by the assessee stands dismissed. The ground raised by the assessee emanates from the appellate order and not in dispute, against which, by following decision in BROOKE BOND INDIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX 1997 (2) TMI 11 - SUPREME COURT the Tribunal sustained the order of the ld. CIT(A). Thus, we find no mistake apparent on record and accordingly, the petition filed by the assessee stands dismissed.

Summary

Issues:
Rectification of Tribunal's order regarding disallowance of ROC fees as capital expenditure.

The judgment deals with a miscellaneous petition seeking rectification of the Tribunal's order regarding the disallowance of ROC fees as a capital expenditure. The assessee contended that the Tribunal confirmed the order of the ld. CIT(A) regarding the nature of ROC fees paid for an increase in authorized share capital as capital expenditure, which was a mistake apparent on record. The ld. DR argued against the rectification, stating that no mistake was evident in the Tribunal's order and that a review was not permissible under section 254(2) of the Act.

The Tribunal examined the grounds of the original appeal where the assessee disputed the disallowance of fees paid to ROC. The Tribunal, in line with a decision of the Hon'ble Supreme Court, upheld the ld. CIT(A)'s view that ROC fees for increasing authorized share capital constitute capital expenditure and cannot be allowed as a deduction. Consequently, the Tribunal dismissed the assessee's ground, emphasizing that it stemmed from the appellate order and was not disputable. The Tribunal found no mistake on record, leading to the dismissal of the petition filed by the assessee.

Ultimately, the Tribunal dismissed the miscellaneous petition filed by the assessee, upholding the decision regarding the disallowance of ROC fees as capital expenditure. The judgment was pronounced on April 30, 2019, in Chennai.