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17. On the contrary, the Ld D.R submitted that the assessee has issued fresh capital and hence the expenses incurred on expansion of capital base is capital expenditure, as held by Hon'ble Supreme Court in the case of Brooke Bond India Ltd (supra). He submitted that the user of funds so raised shall not be taken as determinative factor for deciding the nature of expenditure.

18. We have heard rival contentions on this issue and perused the record. We notice that the facts prevailing in the case of Glaxo Laboratories (India) Ltd (supra) are different, i.e., in the case before Hon'ble Bombay High Court, the assessee was not in requirement of any funds, since it had a cash balance of Rs.50.00 lakhs and borrowing capacity of Rs.10 crores. The assessee was compelled to raise additional capital, since the Government of India put a condition for diluting its share holding in order to give its approval for continuation of a technical collaboration arrangement with its parent company. In these set of facts, the Hon'ble Bombay High Court held that the expenditure incurred on raising the capital is revenue in nature. However, in the instant case, the assessee has been carrying on the business for the past several years. The Reserve Bank of India, the apex body which monitors the functioning of banks, had prescribed certain norms that should be complied by the banks. In M/s. Bank of India the course of compliance of those norms, the assessee has raised capital by issuing shares. It was not the case of the assessee that it was not in need of funds. It was also possible to reach the required Capital adequacy ratio by generating profit also. In any case, the above said decision was rendered by Hon'ble Bombay High Court prior to the decision of Hon'ble Supreme Court rendered in the case of Brooke Bond India Ltd (supra).