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TMI Blog1983 (4) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... can Countries. The other amount is of Rs. 4,555 spent on presentation articles carried by the touring team. It was submitted before the ITO that a delegation comprising the highest Executives of the assessee had undertaken a tour of East African countries, where a sizeable proportion of non-Indians resided and who had connections with India and who were willing to make investments in this country. It was submitted that the tour had been undertaken to tap the above resource for utilisation in the industrial development of the State of U.P. In the course of tour, the delegation had met persons of Indian origin, who were also given explanations and assurances with a view to carry conviction with them regarding their investment in India. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The help received by them for this project had encouraged the sponsors to work actively for the visit of our delegation and for making it successful. The project profiles and data sheets which we had taken with us, were studied in detail and long discussions with groups of entrepreneurs and individuals ensued at which certain conclusions were reached. We have opened separate files for interested parties and each case will be pursued diligently until it takes concrete shape. In business circles, the value of personal contact is in most instances the deciding factor. Enterpreneurs were duly impressed by the fact that I as Chairman of PICUP was leading the delegation. The fact that I was also at that time Chief Secretary to Govt. lent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntact non-Indians, who were interested in making investments in this country as securing of the finance for purposes of investment was one of the objects of the assessee. It was also submitted by the ld. counsel for the assessee that merely because sufficient response could not be had from the non-Indians was no ground for holding that the expenditure was not incurred for the purposes of the assessee's business or that there was any element of pleasure involved in the visit. He referred to two Supreme Court decisions in the case of CIT vs. Walchand Co. (P.) Ltd. (1967) 65 ITR 381 (SC) and J.K. Woollen Manufacturers vs. CIT (1969) 72 ITR 612 (SC). On behalf of the department, reliance was placed on the order of the lower authorities. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us with the business of the assessee or had not been incurred wholly and exclusively for the purposes of its business. The principle laid down by the Gujarat High Court in Ambica Mills Ltd. has no relevance here. In that case, it was held that the expenditure incurred was for the purpose of bringing into existence a capital asset. Such is not the case here. We, therefore, direct the ITO to allow the entire amount of Rs. 82,756. 6. The next contention relates to the assessee's claim for the deduction of another amount of Rs. 37,500. This amount had been spent by the assessee as a registration fees for increase in its authorised capital from Rs. 5 crores to Rs. 7.50 crores. This was claimed as an allowable expenditure. The ITO observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than it was holding before and, therefore, the increase in the limit of its authorised capital would not only increase its capital but would also result in an advantage of enduring nature. This principle squarely applies to the facts of the present case. In fact, the lower authorities had disallowed the claim of the assessee following the above decision. We confirm their views as also the disallowance. 9. We also agree with the view of the lower authorities that the assessee cannot get the benefit of s. 35D(2)(c)(iii) of the Act. The above section can be taken advantage of only in the case of amount paid for registering the company under the provisions of the Companies Act, 1956. In the present case, the expenditure had been incurred as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the year 1975-76, that there were no details available for the expenditure. 11. The assessee appealed to the CIT(A).The latter also upheld the disallowance observing that the quantified expenses were communicated to the assessee vide Govt. of U.P.'s letter dt. 11th April 1977, i.e. after the end of the accounting year. 12. Here also the assessee is in appeal before us. After carefully considering the submissions placed before us, we are of the opinion that the assessee is entitled to the deduction of the entire amount of Rs.19,561. Clause 3(B)(7) of the Memorandum of Association of the assessee shows that one of the objects of the assessee was to form, promote or organise and assist or aid in forming, promoting, organising or aid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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