TMI Blog1995 (9) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... w. According to the assessee, the following three questions are referable : " 1. Whether the Tribunal is right in its view that the expenditure incurred by a finance company doing business in leasing and hire purchasing for raising share capital will not be allowable as a revenue expenditure ? 2. Whether the Tribunal is right in its view that money cannot be considered to be a stock-in-trade of a leasing and financing company ? 3. Whether the Tribunal is right in its view that the assessee being a leasing and financing company doing business with money as its assets and earning profits using money as its instrument of business, the disallowance cannot be restricted to the amount invested on the fixed assets ? " Actually speaking, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt held that obtaining capital by issue of shares is different from obtaining loan by debentures and that a loan obtained cannot be treated as an asset or advantage for the enduring benefit of the business of the assessee. On the other hand, expenditure incurred for obtaining capital by issue of shares does bring about an asset or advantage for the enduring benefit of the business of the assessee and so it has to be held only as capital expenditure. The said view has also been followed in Bharat Carbon and Ribbon Mfg. Co. Ltd. v. CIT [1981] 127 ITR 239 (Delhi). It is clear from India Cements Ltd. v. CIT [1966] 60 ITR 52 (SC) that it is irrelevant to consider the object with which the share capital is raised. In other words, the same rule ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein even after referring to India Cements Ltd. v. CIT [1966] 60 ITR 52 (SC) thus : "It has to be held on the facts here that the sum was spent only for the purpose of business and that there is no capital element in the expenditure." Learned counsel for the assessee also relied on CIT v. Nainital Bank Ltd. [1965] 55 ITR 707 (SC) to contradict the finding of the Tribunal that money cannot be considered stock-in-trade of the assessee, a leasing and financing company. No doubt, the Supreme Court, in the said case observed in the context of the actual question before it that cash was the stock-in-trade of a banking business. But, the context therein was whether loss of cash by dacoity was a trading loss. But that observation of the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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