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TMI Blog2005 (3) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... ER T.R. Sood, Accountant Member. - In this appeal, the assessee has raised the following two effective grounds : (1)The CIT(A) had erred in concluding that fees paid to the Registrar of Companies for increase in the authorised capital cannot be allowed as revenue expenditure ; (2)The CIT(A) erred in not allowing depreciation for the whole year on plant and machinery. 2. With regard to ground N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an unnecessary controversy. 3. We have considered the rival submissions carefully and have also perused the decision of the Hon'ble Supreme Court in the case of Brooke Bond India Ltd. (supra). In that case, fresh capital was issued and even then the expenditure incurred in connection with the issue of such capital was held to be in the nature of capital expenditure despite that such increase i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as directly related to the expansion of the capital base of the company. We are, therefore, of the opinion that the view taken by the different High Courts in favour of the Revenue in this behalf is the preferable view. . . . " (p. 800) Thus, it becomes clear that such expenditure which was incurred towards increase in capital is capital expenditure. In these circumstances, we find nothing wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that depreciation for full year can be allowed only when the plant and machinery is used by the assessee and the concept of the words 'use' and 'used' has already been distinguished and not accepted because section 32 employees the word 'used'. In this connection, he referred to the decision of the Hon'ble Bombay High Court in the case of Dineshkumar Gulabchand Agrawal v. CIT [2004] 267 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also find that the lower authorities have not reached any clear conclusion as to when the plant and machinery was put to use for trial production. Therefore, we set aside the order of the learned CIT(A) and restore the matter back to the file of the Assessing Officer with a direction to find out when the trial production commenced. We make it clear that depreciation should be allowed if the plan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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