Search Results Page

Search Results

1 - 10 of 20 (0.53 seconds)
Zarah Rafique Malik,Mumbai vs Ito (Int Tax) Ward-3(2)(1), Mumbai on 10 March, 2026 cites

Brooke Bond India Limited vs Commissioner Of Income Tax,West ... on 27 February, 1997

Therefore, basis final allotment post IPO, 59,73,136 fresh shares were issued by the company and remaining 2,14,50,100 shares were sold and transferred by the existing 13 ITA 5159/Mum/2025 Zarah Rafique Malik shareholders. In other words, only 21.79% shares have been freshly issued by the company and the remaining 78.21% shares were sold and transferred by the existing shareholders and net proceeds in respect of OFS were transferred to the existing shareholders and therefore, it is wrong to hold that the company is the sole beneficiary of IPO proceeds. Regarding decisions of the Hon'ble Supreme Court in the cases of Brooke Bond India Ltd. vs. CIT [1997] 91 Taxman 26 (SC) and Punjab State Industrial Development Corp. Ltd. vs. CIT [1997] 93 Taxman 5 (SC), it was submitted that in relation to those cases, the assessee had issued fresh shares to increase its share company and claimed expenses which were disallowed by the Revenue authorities and in that background, the Hon'ble Supreme Court has held that though the increase in the capital results in expansion of the capital base of the company and incidentally that would help in the business of the company and may also help in the profit making, the expenses incurred in that connection still retains the character of a capital expenditure since the expenditure is directly related to the expansion of the capital base of the company. It was submitted that in the instant case, there is an increase in the capital base of the company only to an extent of issue of fresh shares amounting to Rs. 59,73,136/- and proportionate to these shares, the company has retained and not passed on the expenses to the respective shareholders. It was accordingly submitted that the Ld.DRP has failed to appreciate the same and has wrongly held that the company is the sole beneficiary of the IPO proceeds. Regarding the findings of the DRP that the assessee has not incurred these expenses, it was submitted that though the expenses were initially incurred by the company, however, the assessee has consented to the incurrence and picking up her liability proportionate to her shares offered as part of the offer for sale, the company has issued invoices on the assessee and the assessee has received the net proceeds, after deducting the expenses on proportionate basis. It was submitted that the assessee has given her consent vide letter dated 25-11-2021 (APB Page 273) to the inclusion of 28,09,000 equity shares held by her as part of offer for sale subject to the terms of the issue as mentioned in the prospectus and other agreements executed in relation to issue and approval of SEBI and other regulatory authorities and has also authorized the company 14 ITA 5159/Mum/2025 Zarah Rafique Malik to deliver a copy of her consent to the Registrar of Companies, pursuant to Section 26 and Section 32 of the Companies Act and the rules and regulations there under as amended, the stock exchanges and any other regulatory authority as may be required and as part of the offer for sale, it has been clearly provided in the prospectus and our reference was drawn to the relevant extract thereof which is contained at pg. 236 of the assessee's Paper Book, which reads as under:
Supreme Court of India Cites 9 - Cited by 288 - S C Agrawal - Full Document

Punjab State Industrial Development ... vs Commissioner Of Income Tax, Patiala on 4 December, 1996

Therefore, basis final allotment post IPO, 59,73,136 fresh shares were issued by the company and remaining 2,14,50,100 shares were sold and transferred by the existing 13 ITA 5159/Mum/2025 Zarah Rafique Malik shareholders. In other words, only 21.79% shares have been freshly issued by the company and the remaining 78.21% shares were sold and transferred by the existing shareholders and net proceeds in respect of OFS were transferred to the existing shareholders and therefore, it is wrong to hold that the company is the sole beneficiary of IPO proceeds. Regarding decisions of the Hon'ble Supreme Court in the cases of Brooke Bond India Ltd. vs. CIT [1997] 91 Taxman 26 (SC) and Punjab State Industrial Development Corp. Ltd. vs. CIT [1997] 93 Taxman 5 (SC), it was submitted that in relation to those cases, the assessee had issued fresh shares to increase its share company and claimed expenses which were disallowed by the Revenue authorities and in that background, the Hon'ble Supreme Court has held that though the increase in the capital results in expansion of the capital base of the company and incidentally that would help in the business of the company and may also help in the profit making, the expenses incurred in that connection still retains the character of a capital expenditure since the expenditure is directly related to the expansion of the capital base of the company. It was submitted that in the instant case, there is an increase in the capital base of the company only to an extent of issue of fresh shares amounting to Rs. 59,73,136/- and proportionate to these shares, the company has retained and not passed on the expenses to the respective shareholders. It was accordingly submitted that the Ld.DRP has failed to appreciate the same and has wrongly held that the company is the sole beneficiary of the IPO proceeds. Regarding the findings of the DRP that the assessee has not incurred these expenses, it was submitted that though the expenses were initially incurred by the company, however, the assessee has consented to the incurrence and picking up her liability proportionate to her shares offered as part of the offer for sale, the company has issued invoices on the assessee and the assessee has received the net proceeds, after deducting the expenses on proportionate basis. It was submitted that the assessee has given her consent vide letter dated 25-11-2021 (APB Page 273) to the inclusion of 28,09,000 equity shares held by her as part of offer for sale subject to the terms of the issue as mentioned in the prospectus and other agreements executed in relation to issue and approval of SEBI and other regulatory authorities and has also authorized the company 14 ITA 5159/Mum/2025 Zarah Rafique Malik to deliver a copy of her consent to the Registrar of Companies, pursuant to Section 26 and Section 32 of the Companies Act and the rules and regulations there under as amended, the stock exchanges and any other regulatory authority as may be required and as part of the offer for sale, it has been clearly provided in the prospectus and our reference was drawn to the relevant extract thereof which is contained at pg. 236 of the assessee's Paper Book, which reads as under:
Supreme Court of India Cites 23 - Cited by 223 - Full Document
1   2 Next