Revision u/s 263 - nature of expenditure - There is no averment ...

Revision u/s 263: Share Application Money as Capital Receipt, Exchange Rate Difference as Capital Expense.

June 19, 2021

Case Laws     Income Tax     AT

Revision u/s 263 - nature of expenditure - There is no averment in the reply of the assessee that the amount of share application money was received for ‘brand building’ of the assessee company. Again turning to the core issue that the share application money in nothing but a ‘capital receipt’ and its return will not change its character. Even otherwise the assessee has not incurred any other amount except the exchange rate difference, which in our considered view is nothing but a ‘capital expenses’. - order passed by AO is not sustainable in law and hence not only erroneous but in so far as prejudicial to the interest of the Revenue. - AT

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