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1 - 10 of 13 (0.21 seconds)Empire Jute Co. Ltd vs Commissioner Of Income Tax on 9 May, 1980
In Warner Hindustan Ltd. v. CIT [1988] 171 ITR 224 (AP), their Lordships dissenting from the view expressed by the Bombay High Court, the Himachal Pradesh High Court and the Delhi High Court, agreed with the view of the Madras High Court and made a, reference to the decision of the Supreme Court given in Empire Jute Co. Ltd. v. CIT [1980] 124 ITR 1. Their Lordships agreed that it is true that the increase in the authorised share capital is obtained from raising the share capital of the company but that is a subsequent step. That may be so, but as a matter of fact, that is for the purpose of acquiring more capital for enduring benefit. As a matter of fact, the stage of acquiring more capital for the ultimate purpose of increasing its volume of the capital for future benefit comes under the nature of enduring benefit. Therefore, such income should be treated to be capital expenditure, and with great respect, we do not agree with the view taken by the Andhra Pradesh High Court.
The Companies Act, 1956
Groz-Beckert Saboo Ltd. vs Commissioner Of Income-Tax on 14 September, 1979
In Groz-Beckert Saboo Ltd. v. CIT [1986] 160 ITR 743, the Punjab and Haryana High Court, agreeing with the decision of the Calcutta High Court, took the view that the fee paid under the Companies Act for increasing the share capital was an expenditure of capital nature.
Upper Doab Sugar Mills Ltd. vs Commissioner Of Income-Tax (Central) on 4 January, 1978
In Upper Doab Sugar Mills Ltd. v. CIT [1979] 116 ITR 928, the Allahabad High Court also took the same view that equity shares constitute the capital of the company and they are an integral part of the permanent structure of the company, and are not in any manner connected with the working capital of the company which is utilised to carry on the day-to-day operations of the business. Therefore, the expenses incurred in connection with the issue of additional equity shares is not revenue expenditure and is not deductible.
Commissioner Of Income-Tax vs Aditya Mills Ltd. on 28 October, 1993
In this connection, we may first refer to the decision of the Rajasthan High Court given in CIT v. Aditya Mills [1990] 181 ITR 195. In this case, the memorandum of association of a company was amended in order to increase its capital and additional capital was made available for carrying on the business of the company and as such the expenditure incurred for the purpose of amending the memorandum and articles of association was considered to be of capital nature and not a revenue nature.
Commissioner Of Income-Tax vs Kisenchand Chellaram (India) P. Ltd. on 16 October, 1979
In CIT v. Kisenchand Chellaram (India) P. Ltd. [1981] 130 ITR 385, the Madras High Court took the view that the assessee paid fees for raising the capital of the company to the Registrar of Companies and claimed the amount paid as a revenue expenditure which was negatived by the Income-tax Officer, but it was allowed by the Appellate Assistant Commissioner and the same was upheld by the Tribunal. On a reference, the court held that without capital a company cannot carry on its business and hence the expenses incurred for increasing the capital were bound up with the functioning and financing of the business. Accordingly, the assessee's claim for deduction was allowable. With great respect, we do not share the view expressed by the Madras High Court for the reasons that the increase of the capital is for the larger benefit of the company and it is with a view to increase its capital hoarding. Therefore, such expenditure in our opinion cannot be treated to be an expenditure of revenue nature.
Warner Hindustan Limited vs Commissioner Of Income-Tax on 24 August, 1987
In Warner Hindustan Ltd. v. CIT [1988] 171 ITR 224 (AP), their Lordships dissenting from the view expressed by the Bombay High Court, the Himachal Pradesh High Court and the Delhi High Court, agreed with the view of the Madras High Court and made a, reference to the decision of the Supreme Court given in Empire Jute Co. Ltd. v. CIT [1980] 124 ITR 1. Their Lordships agreed that it is true that the increase in the authorised share capital is obtained from raising the share capital of the company but that is a subsequent step. That may be so, but as a matter of fact, that is for the purpose of acquiring more capital for enduring benefit. As a matter of fact, the stage of acquiring more capital for the ultimate purpose of increasing its volume of the capital for future benefit comes under the nature of enduring benefit. Therefore, such income should be treated to be capital expenditure, and with great respect, we do not agree with the view taken by the Andhra Pradesh High Court.
Hindustan Machine Tools Ltd. vs Commissioner Of Income-Tax, ... on 17 March, 1988
Similarly, in Hindustan Machine Tools Ltd. (No. 3) v. CIT [1989] 175 ITR 220 (Kar), a sum of Rs. 75,600 incurred by way of filing fee paid to the Registrar of Companies in respect of enhancement of the authorised share capital of the company was held deductible as revenue expenditure. Their Lordships have relied on the decision of the Madras High Court and the earlier decision of the Karnataka High Court. With great respect, for the reasons mentioned in the earlier cases, we do not agree with this view. Therefore, in view of the consensus opinion of a large number of High Courts as against the three High Courts, i.e., the Madras High Court, Andhra Pradesh High Court and Karnataka High Court, we prefer to accept the reasoning given by the High Courts of Calcutta, Gujarat, Rajasthan, Punjab and Haryana, Himachal Pradesh and Allahabad and answer the aforesaid question in favour of the Revenue and against the assessee.