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TMI Blog2015 (6) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... 35D. The rest of the expenditure, in our opinion, can be allowed under section 35D. We, therefore, in the interest of justice and fair play to both the parties, set aside this issue to the file of the AO with the direction that the AO shall verify, after giving the opportunity to the assessee whether the expenditure incurred by the assessee and claimed as amortization under section 35D comply with the condition that in case the AO finds that these expenses comply with the condition under section 35D and to the extent this expenditure does not include the fees paid to the Registrar of Companies, the AO is directed to allow 1/5th of such expenditure to the assessee under section 35D of the income-Tax Act. Thus, this ground is statistically a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as taken as many as four grounds of appeal but since ground nos. 2 and 3 were not pressed, therefore, the same stand dismissed, as not pressed. Now there survive only following two grounds for our adjudication. 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) is wrong and unjustified in not appreciating the facts for allowability of ₹ 39,67,262/- U/s.35D of I.T. Act, 1961. 4. That on the facts and in the circumstances of the case, Ld. CIT(A) has proceeded on erroneous belief and misconception of law in confirming the order of Assessing Officer who enhanced the book profit by ₹ 15,00,095/- in respect of FD interest and ₹ 7,10,093/- in respect of provisions for gratuity, contrary to Explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arefully considered the same along with the orders of the tax authorities below. We noted that the decision of the Hon ble Supreme Court in the case of Punjab State Industrial Corporation Ltd. vs- CIT (supra) relates to the payment of fees to the Registrar of Companies for the issue of the share capital. The said decision has been followed by the Hon ble Supreme Court in the case of Brook Bond India Ltd. vs- CIT 225 ITR 798. The decision in the case of Punjab State Industrial Corporation Ltd. vs- CIT (supra) does not relate to the other expenses related to the issue of share capital. We have perused the provisions of section 35D(2)(c)(iv). We noted that this proviso make the following expenditure to be eligible for deduction, as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be the revenue expenditure but since the fees paid to the Registrar of Companies has not been included under section 35D(2)(c)(iv), therefore, the assessee cannot get deduction for the same, from the details filed by the assessee, which are available before us, it is not clear how much amount has been paid by the assessee by way of fees to the Registrar of Companies. If this expenditure is incurred as fees paid to the Registrar of Companies, it cannot be allowed even under section 35D. The rest of the expenditure, in our opinion, can be allowed under section 35D. We, therefore, in the interest of justice and fair play to both the parties, set aside this issue to the file of the AO with the direction that the AO shall verify, after giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) and as increased by the amount of income-tax as are enumerated under clauses (a) to (g) and has to be reduced by the item as given under clauses (i) to 7(i). The disallowance made in respect of provision for gratuity does not fall under clauses (a) to (j), even the interest on FD, which has been added, also does not fall in any of the clauses as given under clauses (a) to (j) to Explanation 1. Sub-section (2) of section 115JB requires that every company, shall, for the purposes of this section, prepare its profit loss account for the relevant previous year in accordance with provision of part II of Schedule VI to the Companies Act, 1956. It also requires that by preparing the annual accounts including profit and loss account, the acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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