Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2006 (2) TMI HC This

  • Login
  • Cases Cited
  • Referred In
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2006 (2) TMI 102 - HC - Income Tax


Issues:
1. Capital vs. Business Expenditure - Share issue expenses, fees paid to Registrar of Companies, prospectus report fee, amalgamation expenses, and liquidation expenses.
2. Condonation of Delay for Cross-objections.

Capital vs. Business Expenditure:
The High Court addressed four questions raised by the Income-tax Appellate Tribunal regarding the nature of various expenses incurred by the assessee. The Tribunal held that share issue expenses, fees paid to the Registrar of Companies, and prospectus report fee were capital expenditures, not allowable as business expenditures under section 37(1) of the Income-tax Act, 1961. These decisions were based on the apex court's judgment in Brooke Bond India Ltd. v. CIT [1997] 225 ITR 798. However, the High Court ruled in favor of the assessee regarding amalgamation expenses and liquidation expenses, citing the apex court's judgment in CIT v. Bombay Dyeing and Manufacturing Co. Ltd. [1996] 219 ITR 521.

Condonation of Delay for Cross-objections:
The Tribunal considered a question regarding the delay in filing cross-objections by the assessee. The Tribunal found that the cross-objections were filed almost two years beyond the statutory period and declined to condone the delay. The assessee sought condonation based on a subsequent apex court decision and submitted an affidavit explaining the delay. The High Court analyzed the grounds of cross-objection and found that the assessee failed to establish a prima facie case justifying the delay. The Court emphasized the need for cogent evidence to support a claim for condonation of delay and upheld the Tribunal's decision not to condone the delay. The High Court ruled in favor of the Revenue on this issue, as the delay was not adequately justified.

 

 

 

 

Quick Updates:Latest Updates