TMI Blog2006 (3) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The Assessing Officer has clearly noted that Supreme Court has held that expenses relating to increase in the capital of the company would be capital in nature. However we would like the Assessing Officer to verify whether the expenses charged to public issue expenses are relating to increase in capital only or it includes other expenses as well. He would, therefore, limit the prima facie adjustment to the amount relating to increase in the capital of the company. The appeal is allowed in part. Per Shri N. Vijayakumaran, Judicial Member. - I have gone through the order of the learned Senior Vice-President in the above case. As I am unable to agree with the findings of the learned Senior Vice-President, I proceed to pass my order of di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as High Court in the case of CIT v. Kisenchand Chellaram India (P.) Ltd. [1981] 130 ITR 385. The Hon'ble Supreme Court has now settled the issue by way of the aforesaid decisions that the expenditure towards public issue of shares falls under the head 'Capital expenditure'. Therefore the adjustment made by the Assessing Officer is perfectly justified and it is in accordance with law. The finding of the Commissioner (Appeals) is against the decisions of the Hon'ble Supreme Court. Hence it is a fit case that the order of the Assessing Officer should be affirmed by setting aside the order of the Commissioner (Appeals). On the above reasoning I disagree with the finding of the learned Senior Vice-President and the appeal is allowed. ORDER UND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Sr. Vice President or is to be fully allowed, as held by the learned Judicial Member?" 3. WTA Nos. 316 to 318/Mds/1997 Asst.Years: 1990-91 to 1992-93 Umayal Ramanathan v. Asstt. Commissioner of Income-tax. "Whether, on facts and in the circumstances of the case, the amount advanced to the companies in dispute is liable to be added in the wealth of the assessee on the valuation date, as held by the learned Judicial Member or its value is to be taken at zero, as held by the learned Sr. Vice President?" 4. ITA Nos. 2057 2058/Mds/1998 Asst. Years: 1993-94 1995-96 Kumaragiri Textiles Ltd. v. Dy. Commissioner of Income-tax. "Whether, on facts and in the circumstances of the case, the order of the Sr. Vice President i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . v. CIT, 225 ITR 792 and in the case of Brooke Bond India Ltd. v. CIT, 225 ITR 798, the same is added to the income returned." 3. Before the Commissioner (Appeals) the assessee took the ground that the Assessing Officer failed to note that the claim of expenditure towards issue of capital was supported by the decision of the Hon'ble Madras High Court rendered in the case of Kisenchand Chellaram (India) (P.) Ltd. In this case it was held that without capital a company cannot carry on its business and hence the expenses incurred for increasing the capital was bound up with the functioning and financing of the business. The Commissioner (Appeals) held that when the return was filed the decision of the Apex Court was not available. The decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat this point was not adjudicated upon by the Bench. The Third Member, to whom the case is referred on difference of opinion amongst the Members originally hearing the case, is competent to decide only the point or points on which the Members of the Bench originally hearing the case differed. As such I decline to consider the new point formulated by the learned counsel for the assessee at the time of hearing. 6. On the principle that the Supreme Court does not make the law from the date it is pronounced but the Supreme Court declares it to be so from the very inception, Shri V.D. Gopal relied on the decision of the Hon'ble Calcutta High Court rendered in the case of CIT v. Assam Oil Co. Ltd. [1982] 133 ITR 204. In this case the Hon'ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany and as such it was held to be capital expenditure. 9. The law declared by the Supreme Court is the law of the land and as per the mandate of Article 141 of the Constitution it is binding on all Courts and Tribunals in the country. While adjudicating the issue the Assessing Officer acted in conformity with the decision of the Apex Court. Once a matter is adjudicated by the Apex Court there can be no debate on it. As such it cannot be said that the matter was debatable at that point of time. 10. There appears to be no cleavage on the aspect of applicability of the Apex Court decision. The learned Senior Vice-President also followed the decision of the Apex Court by holding that the expenditure relating to increase in the capital of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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