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TMI Blog1987 (4) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Income-tax Appellate Tribunal, Cochin Bench: "1. Whether, on the facts and in the circumstances of this case, the Tribunal is right in holding that (a) the payments were in the course of business ; (b) the payments did not arise out of any transfer of the business; (c) the expenditure was incurred to protect the business ? 2. If the answer to the above question is in the affirmative, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Act. The assessee claimed this amount as business expenditure deductible under section 37 of the Income-tax Act, 1961. The claim was disallowed by the officer on the ground that the so called " dilution expenses " were incurred for the purpose of transfer of equity capital held by foreign citizens to Indian citizens and such expenditure was capital expenditure and, therefore, not deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, it would be deductible as a business expenditure. The former, and not the latter, is the position in the present case. On the admitted facts, the expenditure was incurred for the purpose of changing the capital structure of the company to suit the requirements of the Foreign Exchange Regulation Act, 1973, by obtaining the shares held by foreigners and transferring them to Indian citizens t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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