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TMI Blog2016 (5) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... or not. - I.T.A. No. 71/Nag/2013 - - - Dated:- 26-2-2016 - Shri Mukul K. Shrawat, Judicial Member And Shri Shamim Yahya, Accountant Member For the Appellant : Shri R.K. Ganeriwal. For the Respondent : Shri Narendra Kane. ORDER Per Mukul K. Shrawat, J.M. This is an appeal filed by the assessee emanating from an order of learned CIT(Appeals)-16, Mumbai (Camp at Nagpur), order dated 18-12-2012. The only grounds which are raised before us are ground No. 3 and 4 reproduced below : 1. The addition made on account of disallowance of expenditure as capital expenditure for ₹ 11,60,000/- is incorrect, illegal, bad in law and is to be deleted. 2. The denial of amortization of capital expenditure is also bad in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant as well as material on record have been considered. The issue in question is whether payments made to ROC and cost of stamping of share certificates for the purpose of increasing the share capital of a company is an allowable expenditure. The AO has disallowed the same stating that these are not specified expenses U/s.35D. The appellant on the other hand states these being revenue expenditure are allowable and has relied upon the case laws mentioned above. Perusal of the jurisdictional Bombay High Court decision in the case of Bombay Burma Trading Co. Ltd., (supra) relied upon by the appellant, shows that Question No.3 which was before the Hon ble High Court in reference, viz., Whether, on the facts and in the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustan Insecticides Ltd, 2001 250 ITR 338 (Del) has held that fees paid for increase of share capital is not deductible, that fees paid for increase in authorised share capital is not fees for registration of the company and is not amortisable U/s. 35D. In view of this position the alternative plea of amortisation is also not maintainable, and is accordingly dismissed 5. On this short issue we have heard both the sides. At the threshold learned A.R. has mentioned that the facts have not been clearly understood by the Revenue authorities. The exact nature of the expenditure incurred was as under : During the year 2007-08 (AY-2008-09), Company has paid ROC charges to Registrar of Companies towards its fee and stamp duty for increase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company, hence not capital in nature. It has also been pleaded that on perusal of the nature of expenditure it was nothing but a revenue expenditure. Reliance was placed on Punjab Industrial Development Corporation 225 ITR 792, Brook Bond India Ltd. 225 ITR 798 and a decision of ITAT, Chennai Bench in the case of Laxmi Auto Components 303 ITR 0028. 6. We have examined the facts of the case in the light of the decisions cited. Our first observation is that the Revenue authorities were required to give a clear finding that whether it was incurred before the commencement of his business and whether they were preoperative expenditure to be amortized as per the provisions of section 35D of the I.T. Act. The case law cited by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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