TMI Blog1990 (6) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... wa Mangal Trust ? R. A. No. 962/(Cal) of 1986 : (1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in deleting the disallowance of ₹ 7,500 representing the statutory fee paid in connection with the application to raise the authorised share capital and ₹ 500 representing the application fee paid for issue of bonus shares by holding that the said expenses were not capital expenditure ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in deleting the addition of ₹ 14,467 being export subsidy and duty drawback accrued to the assessee in the previous year but not shown in the profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the mercantile system both for receipts and also for expenditure. Because o the special circumstances, it had decided to treat the amount of export subsidy separately and prepare proper accounts on the basis of cash receipts. The reasons for this were gone into and examined in the earlier judgment. We see no reason to depart from the view taken in the earlier judgment. Question No. 1 in R. A. No. 962/(Cal) of 1986 is in two parts. The first part relates to disallowance of ₹ 7,500 representing the statutory fee paid in connection with the application to raise the authorised share capital. The second part relates to ₹ 500 representing the application fee paid for issue of bonus shares. So far as the expenditure incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h from the point of view of the company and from the point of view of the shareholder, no significant change really comes about as a result of issue of bonus shares. The effect of the issue of bonus shares has been explained by the Supreme Court of the United States of America quoting from an earlier decision in the case of Eisner v. Macomber [1920] 252 US 189. The observation was quoted with approval by the Supreme Court in the case of CIT v. Dalmia Investment Co. Ltd. [1964] 52 ITR 567 (SC), where the question of valuation of bonus shares was considered. In that case, Hidayatullah J. explained the consequences of issue of bonus shares. He observed at page 579 that, in other words, by the issue of bonus shares pro rata, which ranked pari ..... X X X X Extracts X X X X X X X X Extracts X X X X
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