Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2015 (9) TMI 236

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 9) TMI 804 - ITAT MUMBAI) arising on an identical facts. The Revenue carried the above order. This Court by order [2015 (2) TMI 863 - BOMBAY HIGH COURT] dismissed the Revenue's appeal holding that expenditure so incurred by the Respondent-Assessee for purchase of shares and subsequent cancellation thereof was only for the purpose of enabling smooth running of its business. It was further held that the aforesaid finding is essentially a finding of fact and the Revenue was not able to show that the finding is in any manner perverse and/or arbitrary. The above observation applies with equal force to the present facts. Decision of the Apex Court in the case of Brooke Bond [1997 (2) TMI 11 - SUPREME Court] is inapplicable to the present facts. .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... d in assuming jurisdiction u/s. 263? 3. During the Assessment Year 2006-07, RespondentAssessee had debited a sum of ₹ 3.45 Crores to its profit and loss account. This being expenditure incurred towards buyback of shares. The Assessing Officer by his order dated 29th December, 2009 passed under Section 143(3) of the Act accepted the same while determining the taxable income. 4. Thereafter, on 31st March, 2011, the Commissioner of Income Tax in exercise of its powers under Section 263 of the Act passed an order in Revision, setting aside the Assessment Order dated 29th December, 2009 for the Assessment Year 2006-07. Further the inter alia, directed the Assessing Officer to add an amount of ₹ 3.45 Crores to the taxable incom .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... urpose of exercising powers of revision under Section 263 of the Act. 6. Mr. Suresh Kumar, learned Counsel appearing for the Revenue submits that the impugned order of the Tribunal in Echjay Industries (supra), was challenged before this Court. However, the same was dismissed not on merits but in view of the failure to remove office objections. In any case, it is his submission that in view of the decision of the Apex Court in Brooke Bond India Ltd. v/s. CIT 225 ITR 798 , the issue in controversy is covered in in favour of the Revenue as it holds any expenditure incurred in respect of issue of share capital cannot be allowed as revenue expenditure. Therefore, he submits that the question be admitted for the purpose of consideration. 7 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... essee for purchase of shares and subsequent cancellation thereof was only for the purpose of enabling smooth running of its business. It was further held that the aforesaid finding is essentially a finding of fact and the Revenue was not able to show that the finding is in any manner perverse and/or arbitrary. The above observation applies with equal force to the present facts. 9. The decision of the Apex Court in the case of Brooke Bond (supra) relied upon by the Revenue deals with the situation where the assessee therein issued shares to the general public with a view to increase its share capital. The expenditure incurred by Brooke Bond to increase its capital, was claimed to be Revenue in nature and, therefore, deductable. The Apex C .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates