9911796707
TMI Blog1990 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... l notice 5,141.00 4. Stationery Prtg. exps. 3,000.00 5. Liquidators auditors exps. 5,000.00 6. Other expenses 3,140.00 --------------------- 57,993.00 --------------------- Total A + B = 75,704.20 ECC 30% 22,711.20 IPL 70% 52,993.00 = 75,704.20 Note : As per clause No. 10 of scheme of Amalgamation, all costs, charges and expenses pertaining to amalgamation should be borne by IPL ECC in preparation of 70% and 30% respectively. Rs. (1) IPL Share (70%) 52,993.00 Less : Exps. will be paid by IPL 10,000.00 ----------------- = 42,993.00 ----------------- (2) ECC Share (30%) 22,711.20 Less : Adv. bill paid 7,711.00 ---------------- Provision to be made 15,000.20 -------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em of expenditure connected with any capital item such as the acquisition of any capital asset or its expansion. 4. The learned departmental representative relied upon the following two decisions : Addl. CIT v. Rohit Mills Ltd. [1976] 104 ITR 132 (Guj.) CIT v. Mihir Textile Ltd. [1976] 104 ITR 132 (Guj.) He submitted that the test was whether the expenditure brought about the benefit of any enduring nature. In that connection he drew the attention of the Tribunal to the directors' report where it was shown that the company had incurred a loss of Rs. 81,478 and also the observation regarding the operations of the company which showed that the turnover was lower this year compared to the last year, that there was recession in demand b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company itself ceases to exist. When this question was put to assessee's counsel he replied that the amalgamated company continues its existence through the amalgamating company. But that is not convincing. However, the aforesaid decision of the Madras High Court in the case of Bush Boake Allen India Ltd. as stated above holds that the allowability of legal expenses cannot take the colour of the transaction to which they relate. Applying that decision, the legal expenses in the above details that I have given to the extent that the assessee-company was to bear them would be allowable. This may be worked out by the ITO. The matter is restored to him for that purpose. 6. The appeal is allowed for statistical purposes - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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