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2010 (12) TMI 532 - AT - Income TaxDisallowance - expenditure is pertaining to the advertisement in news paper for issue of warrants -The expenditure on advertisement and the newspaper for the issue of the warrant marketing and public relations expenditure, expenditure on the feasibility study for expansion and diversification etc cannot be treated as expenditure having any nexus with the issue of share capital cannot be disallowed. Hence, we modify the order of the Ld. CIT to the extent of ₹ 70,000/- which has a direct expenditure related to the issue of the preference share. legal and professional charges - professional fees paid to Chartered Accountants - fees paid to Chartered Accountants for attending the different income-tax matters and also in respect of remuneration for statutory and tax audit. In our opinion, the same cannot be disallowed and Ld. CIT is not correct to say that the said expenditure has to be disallowed. So far as the sum of ₹ 34,605/- is concerned, it is seen that the said pertains to the appeal filing fees before the CIT, filing different forms before ROC, fees for filing appeals before the ITAT and hence, same is also allowable expenditure. expenditure shown on register and share transfer charges, - the details filed by the assessee before Ld. CIT, it is seen that these are expenses having no direct nexus with the issue of the share capital but are incurred for the statutory compliance of the SEBI Guidelines, stock listing etc and Ld. CIT is not correct to say that the said expenditure is prima facie capital in nature. brokerage - the brokerage is paid for acquiring the premises for 11 months. Nowhere, it is a case of Ld. CIT that it is for purchasing the premises. In our opinion, the said expenditure is allowable one and does not partake the character of capital expenditure. The Ld. CIT has also noted the said expenditure also includes commission on finance, service charges for arranging inter-corporate deposits, commission on discounting of L.C. etc. We also find that the Ld. CIT himself is not sure whether the said expenditure is capital or revenue in nature but is only suspicion. In our opinion, there is no justification, more particularly, in the proceedings u/s.263 to direct the A.O. to verify and then to allow. the custom redemption find and custom penalty - the Ld. CIT has referred to the order of the Customs Excise and Service-tax Appellate Tribunal (West Zone) (CESAT) Mumbai. The Ld. CIT has made the detailed discussion on this issue. It appears that the redemption fine and penalty has been confirmed by the CESAT. In our opinion, the CIT is rightly considering the said expenditure for exercising the jurisdiction u/s.263. service tax - The Ld. CIT noted that the sum of ₹ 39,079/- has been debited on account of difference of service tax paid from cheque to December 2005 only. The CIT has noted that no documentary evidence was filed by the assessee to establish the claim Regarding brokerage charges for premises - the assessee has deducted the TDS and the acknowledgement of the TDS return filed it the A.Y. 2006-07 are placed before the A.O - The Ld. Counsel referred to page 12 of the compilation where copy of the reply filed to Ld. CIT in the 263 proceedings is placed - He, therefore, pleaded that no disallowance u/s.40A(ia) can be made - Appeal is partly allowed
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