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TMI Blog1983 (2) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... e paid to the Controller of Capital Issues and the balance paid to the auditors for examining the application to the Controller of Capital Issues. This amount spent in connection with the issue of bonus shares was held by the ITO as capital expenditure. On appeal, the Commissioner (Appeals) had also confirmed the same. On further appeal the Tribunal in their order dated 3-7-1982, confirmed the decision of the revenue authorities, mainly relying on the decision of the Supreme Court in the case of India Cements Ltd. v. CIT [1966] 60 ITR 52. 3. Shri N.A. Dalvi, the learned representative for the assessee, took us through the miscellaneous application filed by the assessee. He stated that subsequent to the decision dated 3-7-1982 of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of CIT v. R. Chelladurai [1979] 118 ITR 108 (Mad.), he urged that the Tribunal cannot review its own order under section 254(2). His point was that allowing miscellaneous application of the assessee would amount to a review of the earlier order dated 3-7-1982 of the Tribunal. Further, he stated that, in any case, the question as to whether expenses in connection with the issue of bonus shares constituted capital or revenue expenditure is open to debate and such a debatable issue cannot be rectified under section 254(2). For this proposition, he relied on the decision in the case of Jiyajeerao Cotton Mills Ltd. v. ITO [1981] 130 ITR 710 (Cal.) and T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC). He referred to the decision in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a decision on a particular point by the High Court of the State, it is binding on the income-tax authorities in that State, and merely because there is some judicial divergence of opinion on that point between some High Courts, it cannot be said that there is a still scope for debate on the point and that, therefore, section 154 of the Act is not attracted to the case. He also referred to the decision in the case of S.A.L. Narayana Row v. Model Mills Nagpur Ltd. [1967] 64 ITR 67 (SC), in this connection, for the proposition that the authority concerned is bound to rectify a mistake apparent from the record. 6. We have carefully considered the contentions of both the parties as well as the facts on record. The issue raised in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure ? Question No. 6 : Whether, on the facts and in the circumstances of the case, the sum of Rs. 5,250 estimated by the Tribunal to be the expenditure incurred by the assessee by way of fees in connection with the issue of bonus shares out of the total fees of Rs. 52,500 was an allowable revenue expenditure and not in the nature of capital expenditure ? " The Bombay High Court has held after considering the Supreme Court decision in the case of India Cements that such expenses are admissible. They categorically answered as follows : " Question Nos. 4, 5 and 6 : In the affirmative and in favour of the assessee." There is no dispute that the decision of the Bombay High Court is binding on us. It is also apparent that the Bombay Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts in that case are evidently quite different from those of the instant case. 8. In the case of Jiyajeerao Cotton Mills, the facts were quite different. There was divergence of opinion on a certain point which was certainly debatable so long as those divergences continued. During the continuation of such divergence of judicial opinion, the ITO passed an order of rectification under section 154 on that point. The question was whether the order under section 154 was maintainable specially in view of the fact that the Supreme Court had given a decision subsequent to the date of order under section 154 upholding the view of the ITO. The High Court pointed out that it is true that the Supreme Court lays down the law of the land, which opera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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