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TMI Blog2006 (4) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... r payment of the said amount. Therefore without making the actual payment the assessee was not entitled to the aforesaid deduction - Amount paid for issue of shares - held that the expenditure incurred by a company in connection with issue of shares, with a view to increase its share capital, is directly related to the expansion of the capital base of the company and is capital expenditure, even t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal was right in holding that ESI contribution of Rs. 4,50,000 is not to a fund and it does not come under section 43B(b)?" The facts leading to the reference are as under: The assessment year involved is 1984-85. The assessee is an employer. The Assessing Officer allowed an expenditure of Rs. 30,000 incurred by the assessee in respect of issue of shares on the ground that it was a capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue, the aforesaid two questions of law are referred for our opinion. We have heard learned counsel for both the parties. The Supreme Court in the case of Brooke Bond India Ltd. v. CIT [1997] 225 ITR 798, dealing with the expenditure incurred by a company in connection with issue of shares has held that the expenditure incurred by a company in connection with issue of shares, with a view to inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of-.... (b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees; or.... shall be allowed (irrespective of the previous year in which the liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id, as a matter of fact, the employer/assessee is not entitled to claim deductions. In the instant case, admittedly, the assessee has not paid the said amount to the ESI Department. In the accounts, a provision is made for payment of the said amount. Therefore without making the actual payment the assessee was not entitled to the aforesaid deduction. In that view of the matter, the Tribunal was i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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