1992 (5) TMI 55

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..... thorised capital from Rs. 25,00,000 to Rs. 1,00,00,000. For this purpose the assessee incurred expenditure of Rs. 11,310 on account of filing fees. The Assessing Officer negatived the claim of the assessee by holding that the expenditure was not admissible as business expenditure. The learned Commissioner of Income-tax (Appeals) held that the expenditure in question was capital in nature, but amortised the expenditure under section 35D(2)(c)(iv) of the Act and directed the Assessing Officer to allow 1/10th of the eligible expenditure in the year under consideration. The Department has not come in appeal, but the assessee is in appeal. 4. Shri M.S. Syali, Advocate, the learned counsel for the assessee, submitted that there was conflict of .....

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..... tories had increased and that no benefit of enduring nature had accrued to the assessee nor had any capital asset been acquired. It was vehemently argued that the expenditure on filing fees was for the purpose of promoting the business and that section 35D was not attracted in the present case, because neither the expenditure was incurred before the commencement of the business nor after the commencement of the business for the purpose of extension of the industrial undertaking or in connection with setting up of a new industrial unit. It was, therefore, submitted that the expenditure was allowable as a business expenditure. 5. In the alternative, it was submitted that where two views were possible, the view favourable to the assessee mus .....

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..... clear that the majority of the High Courts hold the view that the expenses incurred in connection with the issue of additional equity shares is not revenue expenditure and is not deductible. They also hold that expenses incurred in raising capital are expenses of exactly the same character whether the capital is raised at the floatation of the company or thereafter. We further find that the Delhi High Court decision in the case of Bharat Carbon Ribbon Mfg. Co. Ltd. also lays down that the expenditure incurred with a view to increasing its authorised capital was capital expenditure. The question referred to the Hon'ble High Court for its opinion in that case was whether the expenditure of Rs. 5,625 for increase in the authorised capital of .....

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