TMI Blog2005 (2) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... ents relied upon. The assessee is a public limited company. It is engaged in the manufacture and sale of commercial vehicles, engines and their spare parts. During the relevant period it claimed Rs. 14,21,52,402 as Euro Issue expenditure. These expenditures were treated by the assessee as of revenue nature. The Assessing Officer declined to allow deduction under section 37 of the Income-tax Act, 1961. Alternatively, claim was made under section 35D of the Act. The Assessing Officer held that there was no extension or setting up of new unit. As such the requirement of section 35D(1)( ii ) was not satisfied. 3. Shri R. Vijayaraghavan, the learned counsel for the assessee, submitted that the case of the assessee comes within the ken of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modernization of its Ennore Plant, particularly the Paint shop. 5. It was submitted before us that the Units at Hosur I and II planned to operate to capacity expansion, so also the units at Bhandara and Ennore. It was claimed that the total issue proceeds of 430 crores was utilized for the purpose of capacity expansion at Hosur I II Plant and at Bhandara. The expenditures were claimed under the following heads : Rs. "1.Stay, travel and food expenses 12,92,063 2.Telephone 2,46,990 3.Local Audit Fees 11,03,675 4.Gifts 4,234 5.Stay, car expenses and fees 29,46,704 6.Listing fees 1,000 7.Management fees 12,29,523 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ics Ltd. [1986] 162 ITR 819 . In this case the Hon ble High Court has held that the word being has been used in sub-clause ( iv ) of section 35D(2)( c ) by way of illustration and does not restrict it only to the words "underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of the prospectus". Therefore, in the case of issue of shares for public subscription by a company, the expenditure incurred in connection with refund of the amount over-subscribed are expenses incurred in connection with the issue of shares and an assessee will be entitled to deduction of such expenditure as provided in section 35D. 7. In the case of CIT v. Multi Metals Ltd. [1991] 188 ITR 151 (Raj.) it was held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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