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2018 (10) TMI 1671 - AT - Income TaxROC fees for increasing authorized capital - Disallowance of expenditure u/s 37 - assessee has not commenced its business operation - nature of expenditure - CIT(A) has observed that the ROC fees paid for increase in authorized share capital of a company is a capital expenditure in nature and hence cannot be allowed as an allowable deduction - HELD THAT:- In the case of Punjab State Industrial Development Corporation Ltd. v. CIT [1996 (12) TMI 6 - SUPREME COURT] as well as Brooke Bond India Ltd. v. CIT [1997 (2) TMI 11 - SUPREME COURT] has categorically held that the expenditure incurred by a company in connection with issue of shares with a view to increase its share capital, is directly related to the expansion of the capital base of the company, and is capital expenditure, even though it may incidentally help in the business of the company and in the profit-making. CIT(A) has rightly held that the ROC fees paid for increase in authorized share capital of a company is a capital expenditure in nature and hence cannot be allowed as an allowable deduction. Thus, we find no reason to interfere with the order passed by the CIT(A) on this issue and accordingly, the ground raised by the assessee stands dismissed.
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