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Showing contexts for: PATIALA in Punjab State Industrial Development ... vs Commissioner Of Income Tax, Patiala on 4 December, 1996Matching Fragments
1. The question referred for decision reads as under:
Whether, in the facts and circumstances of the case, the Tribunal was right in law in holding that the amount of Rs. 1,50,000 paid to the Registrar of Companies, as filing fee for enhancement of capital was not revenue expenditure ?
2. Since there was a conflict of opinion on this point amongst the various High Courts, it was thought expedient by the Income-tax Appellate Tribunal, Chandigarh Bench, to directly refer the question for decision by this Court under Section 257 of the Income-tax Act, 1961, The factual background in which the question arises for determination is that the applicant, Messrs. Punjab State Industrial Development Corporation Ltd,, filed the return of its total income declaring an income of Rs. 13,83,049 on June 30, 1979. In the profit and loss account an amount of Rs. 1,50,000 was claimed as revenue expenditure, the same having been paid to the Registrar of Companies as filing fee for enhancement of capital of the company. The Inspecting Assistant Commissioner of Income-tax (Assessment), Chandigarh, allowed the expenditure but the Commissioner of Income-tax, Patiala, in exercise of the power conferred on him under Section 263 of the Income-tax Act revised the order suo motu as in his view the expenditure of Rs. 1,50,000 was wrongly allowed as revenue expenditure. He, therefore, enhanced the income computed by the lower authority by the amount of Rs. 1,50,000 and directed that the assessment be revised accordingly. Feeling aggrieved by the said order, the assessee preferred an appeal before the Income-tax Appellate Tribunal. The Tribunal upheld the order of the Commissioner placing reliance on the judgment in (Iroz-Beckert. Sahoo Ltd. v. CIT [1986] 1G0 ITR 743 of the Punjab and Haryana High Court. It was thereafter that a reference was sought under Section 256(1) of the Income-tax Act, but as stated above, in view of the conflict of opinion amongst the High Courts in the country the question has been directly referred to this Court for determination.