Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 1489 - ITAT AHMEDABADExpenditure for reduction of authorized share of the company - Held that:- Procedure for reduction in share capital (section 100-104 of the Companies Act, 1956) and for amalgamation (section 390-394 of the Companies Act, 1956) are similar as they both require application to and sanction of the High Court and requirement with respect to disclosures are similar. Even the powers of the High Court with respect to the two procedures are similar. Ld.AR also submitted a copy of the ITAT Kolkata in ACIT Vs. Britannia Industries Ltd. [2010 (8) TMI 635 - ITAT KOLKATA ] it has been held that expenses incurred for buy back of shares are revenue expenses because there is no permanent change in the capital structure of the company, nor a benefit of enduring nature and the purchases are effected for company’s free reserves which are otherwise capable of being freely distributed to the shareholders. It was further submitted that reduction in share capital and buy back are essentially the same and neither result in a benefit of enduring nature as well as Section 77 of the Companies Act, 1956 prescribes the same procedure for buy back and reduction in the case of limited companies. For these reasons, the decision of the ITAT Kolkata would be applicable to the assessee’s case as there is no permanent change in capital expenditure. - Decided in favour of assessee for statistical purpose.
|