9911796707
TMI Blog2018 (7) TMI 1469X X X X Extracts X X X X X X X X Extracts X X X X ..... made u/s 14A by holding that assessee did not earn any exempt income. 2. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in deleting the disallowance of preliminary expenses written off u/s 35D. 3. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred by not following the Supreme Court decisions in the case of Brooke Bond India Ltd Versus CIT (225 ITR 798) and Punjab State Industrial Development Corporation Ltd Versus CIT(220 ITR 792) 4. The appellant prays that the order of Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored". 2. Brief facts of the case are that the assessee company, engaged in the business of supply and trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider the preliminary expenses of Rs. 22, 40, 400 u/s 35D. From the P&L A/c of the assessee, the AO u/s 35D observed that during the financial year 2010-11, the assessee has incurred R. O. C fee expenditure amounting to Rs. 1, 11, 02, 000 towards increase in authorized share capital and debited the same to the P&L A/c and that the assessee added back the expenditure and claimed 1/5th of the expenditure as a deduction u/s 35D of the Act. Observing that the ROC fee expenditure incurred towards increase in authorized share capital is not allowable u/s 35D, it being capital in nature and relying upon the decision of the Hon'ble Delhi High Court in the case of Bharat Carbon & Ribbon Mfg. Co. Ltd vs. CIT reported in (1981) 127 ITR 239 (Del. ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the decisions relied upon by the learned DR are distinguishable in facts from the case of the assessee. He submitted that the Hon'ble Supreme Court in the case of Brooke Bond India Ltd (Supra) was considering the issue of allowability of expenditure incurred in connection with increase of share capital u/s 37(1) of the Act and also in the case of Punjab State Industrial Development Corporation (Supra) wherein the Hon'ble Supreme Court observed that the amount of Rs. 1, 50, 000 paid to the Registrar of Companies, as filing fee for enhancement of capital was not revenue but was capital in nature. He placed reliance upon the decision of the Hon'ble High Court of Rajasthan in the case of CIT vs. Multi Metals Ltd reported in (1991) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy reference, the relevant provisions are reproduced hereunder: " Section 35D(1) of the I. T. Act: (1) Where an assessee, being an Indian company or a person (other than a company) who is resident in India, incurs, after the 31st day of March, 1970, any expenditure specified in sub- section (2), - (i) before the commencement of his business, or (ii) after the commencement of his business, in connection with the extension of his industrial undertaking or in connection with his setting up a new industrial unit, the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deduction of an amount equal to one- tenth of such expenditure for each of the ten successive previous years beginning with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, be allowed a deduction of an amount equal to one-tenth of such expenditure for each of the ten successive previous years beginning with the previous year in which the business commences or, as the case may be, the previous year in which the extension of the industrial undertaking is completed or the new industrial unit commences production or operation:" 13. In the Income Tax Return which was filed for the Assessment Year 1995-96 the assessee had claimed that it had incurred a sum of Rs. 45, 51, 890/- towards the share issue expenses and had claimed 1/10th of the aforesaid share issue expenses under Section 35D of the Act from the Assessment Years 1995-96 to 2004-05. This claim of the assessee was found to be justified and allowabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Section 35D of the Act. In any case, it warrants repetition that in the instant case under the very same provisions benefit is allowed for the first two Assessment Years and, therefore, it could not have been denied in the subsequent block period. We, thus, answer question No. 1 in favour of the assessee holding that the assessee was entitled to the benefit of Section 35D for the Assessments Years in question". 11. Respectfully following the decision of the Hon'ble Supreme Court in the case of M/s. Shasun Chemicals & Drugs Ltd (cited supra), we uphold the findings of the CIT (A). Therefore, the Revenue's appeal is dismissed. 12. In the result, Revenue's appeal is dismissed. Order pronounced in the Open Court on 18th July, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
