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Revenue Expenditure, Income Tax

Issue Id: - 118229
Dated: 14-11-2022
By:- Ethirajan Parthasarathy
Revenue Expenditure

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A partnership is into business of Layout forming and selling plots. The undeveloped land was contributed by one of the partners towards his capital. Before all sites were sold, the said partner retired and partnership was re- constituted.

As per rules in Karnataka, the Firm had to pay stamp duty and registration fee on value of sites remaining unsold.

The query is whether such payment of stamp duty and registration charges for registering the re-constituted firm is allowable expenditure u/s 37.

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1 Dated: 15-11-2022
By:- KASTURI SETHI

Dear Sir,

Stamp duty and registration charges are revenue expenditure as held by Karnataka High Court. This case law is based on the judgement of the Supreme Court.

2022 (9) TMI 54 - KARNATAKA HIGH COURT DR. BHUJANG SHETTY VERSUS THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-5 BENGALURU


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