TMI Blog2006 (2) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... in not condoning the delay in filing the cross-objection, i.e., in favour of the Revenue and against the assessee. Second part of the question is left unanswered - Tribunal was right in holding that share issue expenses is capital expenditure - Tribunal was right holding that the fees paid to the Registrar of Companies for increasing the share capital of the company is capital expenditure - Tribunal was right in holding that the prospectus report fee for new issue of shares is capital expenditure - amalgamation expenses and liquidation expenses of winding up are capital expenditure - - - - - Dated:- 6-2-2006 - Judge(s) : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.- The Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as right in law in not condoning the delay for submission of the cross-objection and in further holding that such a ground cannot be raised for the first time before the Tribunal in the form of a belated cross-objection in respect of a point which was admittedly not the subject-matter of assessment order passed by the Assessing Officer nor it was the subject-matter of appeal decided by the Commissioner of Income-tax (Appeals)?" It is an admitted position between the parties that four questions arising out of appeal stand concluded by the decisions of the apex court and hence, it is not necessary to set out the facts and contentions in detail. Question No. 1 stands answered in favour of the Revenue and against the assessee in the light o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross-objection: 1. Rs. 38,05,368 on account of customs duty included in closing stock of amalgamating companies be excluded because it is not taxable income as per the important principle laid down by the Supreme Court in the case of Saraswati Industrial Syndicate Ltd. v. CIT [1990] 186 ITR 278 that if the assessee had changed on account of any circumstances, the benefit received by the earlier assessee could not be taken as income in the hands of the successor-assessee? 2. The assessee was recently advised that the above Supreme Court decision was not available either when the assessee filed the return, the assessment order came to be passed or when the appeal was filed or when the appeal was decided on July 26,1989. The decision was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal it was submitted by Mr. Shah that in the light of the following decisions of the apex court, the Tribunal was in error and the delay was required to be condoned in the circumstances: (i) Nand Kishore v. State of Punjab [1995] 6 SCC 614; (ii) N. Balakrishnan v. M. Krishnamurthy [1998] 7 SCC 123; and (iii) Haryana Financial Corporation v. Jagdamba Oil Mills [2002] 110 Comp Cas 20 (SC); [2002] 3 SCC 496. In relation to the second part of the question Mr. Shah placed reliance on the apex court decision in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 to submit that the Tribunal had committed an error in holding that the assessee could not raise the issue for the first time before the Tribunal. He also in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party seeking condonation has to show by cogent evidence sufficient cause in support of its claim of condonation. The onus is greater. One of the propositions of settled legal position is to ensure that a meritorious case is not thrown out on the ground of limitation. Therefore, it is necessary to examine, at least prima facie, whether the assessee has or has not a case on the merits. As can be seen from the grounds of cross-objection, the assessee placed reliance on the apex court decision in the case of Saraswati Industrial Syndicate Ltd. v. CIT [1990] 186 ITR 278 in support of the proposition that it was entitled to the relief that it sought on the basis of being a different assessee. The learned advocate for the applicant apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Saraswati Industrial Syndicate Ltd. [1990] 186 ITR 278 had to be applied. As the said decision is the plank on which the plea of sufficient cause is built it cannot be stated that the Tribunal committed any error in refusing to condone the delay. Furthermore, on the facts the Tribunal has found that the apex court decision in the case of Saraswati Industrial Syndicate Ltd. [1990] 186 ITR 278 was delivered on September 4, 1990, while the cross-objection was filed on December 20, 1993. Therefore, counting the period of limitation from the point of time of the service of the appeal memorandum of the Departmental appeal on the assessee the Tribunal has found that there was delay of one year and eleven months which remained unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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