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TMI Blog2013 (10) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not alter the nature of the expenditure and it remains the capital expenditure – In the present case, admittedly the expenses were incurred by the assessee for the purpose of putting up publication. This was done for the purpose of widening its capital base. Even though the assessee stated that this expenditure was incurred so as to improve the cash availability, yet, the fact remains that the expenditure incurred was only for the purpose of expansion of the capital base – Decided against the Assessee. - TC (Appeal).No.2699 of 2006 - - - Dated:- 23-7-2013 - Chitra Venkataraman And K. B. K. Vasuki,JJ. For the Appellant : Mr. R. Kumar For the Respondent : Mr. T. Ravikumar JUDGMENT (Judgment of the Court was delivered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose. In the circumstances, the expenditure could only be treated as revenue in nature. Thus, aggrieved by the assessment, the assessee went on appeal before the Commissioner of Income Tax (Appeals), who disagreed with the assessee by following the above cited decision viz., 225 ITR 798 BROOKE BOND INDIA LIMITED v. CIT. Thereupon, the assessee went on further appeal before the Income Tax Appellate Tribunal. The assessee contended that the expenditure incurred was only for the purpose of bettering the cash availability and the working capital of the company. In the circumstances, by placing reliance on the decision reported in 263 ITR 357 DEPUTY CIT v. ASSAM ASBESTOS LIMITED, the assessee contended that the expenditure be allowed as reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 5. As far as the reliance placed by the assessee on the decision reported in 259 ITR 582 C.I.T. v. TAMIL NADU CHEMICAL PRODUCTS LIMITED is concerned, the same was concerned about the claim under Section 35AB of the Income Tax Act. This Court pointed out that irrespective of whether it is a capital or a revenue expenditure, the claim has to be treated only in accordance with Section 35AB and the deduction allowable in respect of consideration for acquiring knowhow. The assessee therein entered into agreements for acquisition of know-how with two parties, one German and the other Japanese. Liquid petroleum gas was an essential requirement in the process acquired. After the payments were made in part to the company in Japan and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenditure as revenue expenditure. Thus, on the allowability of the question, the Court held that the expenditure for preparation of feasibility report to bring into existence the mini cement plant would be revenue in nature, and hence, the assessee was entitled to deduct the expenses. The said decision also does not, in any manner, advance the case of the assessee for the reason that the expenditure or otherwise for the feasibility report would be in the realm of revenue expenditure and hence, rightly in that case, the Gauhati High Court held that the expenditure was revenue in nature. This decision also does not, in any manner, advance the caseof the assessee. 6. As far as the present case is concerned, admittedly the expenses were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the direction of the Reserve Bank, irrespective of whether it did so or not, after the direction of the Reserve Bank or otherwise, the case would nevertheless be covered by the decision 225 ITR 792 PUNJAB STATE INDL. DEVE. CORPN. LTD v. C.I.T. It may be seen from the facts given in the decision 253 ITR 445 CIT v. KODAK INDIA LIMITED, that the assessee incurred expenditure for the public issue of shares to increase its share capital pursuant to a direction of the Reserve Bank to do so to reduce its non residential holding to 40 percent. Thus, taking the view irrespective of direction by the Reserve Bank, the expenditure incurred for the public issue of shares was capital expenditure. The said decision is squarely applicable to the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 3.10.2012, wherein this Court had accepted the assessee's case that part of the expenses would go for expenses for deduction as revenue expenditure. We have gone through the said decision, to which one of us is a party. We do not find any justifiable ground to extend the benefit of the said case to the facts of the case on hand. In the decided case, the Commissioner had given categorical finding that the nature of the expenses were allowed therein as a revenue, as those expenses were to meet out the day today transactions of the business of the assessee. Thus in the face of the factual finding rendered by the Commissioner, based on the report received from the Assessing Officer, this Court rejected the Revenue's appeal. 11. Even thou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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