TMI Blog2001 (2) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... the instance of the assessee: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the expenditure of Rs. 1,00,500 on account of fees paid by the assessee to the Registrar of Joint Stock Companies, Delhi, for increasing the authorised share capital of the company was a capital expenditure and not a revenue expenditure?" At the instance a the Revenue: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the assessee is entitled to amortisation of expenditure fee as a result of increase in the share capital under section 35D(2)(c)(iii) of the Income-tax Act, 1961?" The dispute relates to the assessment year 1975-76. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35D(2)(c)(iii) had application to the facts of the case. The matter was carried in appeal before the Tribunal. Before the Tribunal, the assessee's stand was that the fees paid to the Registrar of Companies to increase share capital was revenue expenditure and for the purpose reliance was placed on a decision of the Madras High Court in CIT v. Kisenchand Chellaram, (India) Pvt. Ltd. [1981] 130 ITR 385. On the facts it was pleaded that there was similarity with the factual position in the Madras High Court decision and, therefore, the claim should have been allowed. In the alternative, it was submitted that assessee was entitled to deduction in terms of section 35D(2)(c)(iii) and /or section 35D(2)(c)(iv). The department's stand was that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to in sub-section (1) shall be the expenditure specified in any one or more of the following clauses, namely:-... (c) where the assessee is a company, also expenditure-... (iii) by way of fees for registering the company under the provisions of the Companies Act, 1956 (1 of 1956);" It has to be noted that the Tribunal referred to Schedule X to the Companies Act, 1956 (in short, "the Companies Act"). The said schedule refers to the table of fees to be paid to the Registrar in respect of a company having a share capital. Item 1 of the Schedule indicates Rs. 200 as prescribed fees payable for registration of a company whose nominal share capital does not exceed Rs. 20,000. Item 2 of the Schedule indicates an additional fee for registra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference between registration of the company and action taken for increase of the share capital. Part II of the Companies Act deals with incorporation of a company and matters incidental thereto. Section 12 deals with mode of forming an incorporated company. Sections 33 and 34 deals with registration of memorandum and articles and effect of registration respectively. Section 97 deals with the requirement of notice of increase of the share capital or of members. Section 611 deals with the fees payable under Schedule X. Sub-section (1) of section 34 to which we have made reference earlier stipulates that on the registration of the memorandum of a company, the Registrar shall certify under his hand that the company is incorporated and, in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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