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Ito,Ward-9(1), Kolkata, Kolkata vs M/S M.P. Jewellers & Co.(1945) Pvt. ... on 21 June, 2019 cites

Commissioner Of Income-Tax Delhi- I vs M/S. Hindustan Insecticides Ltd. on 14 February, 2001

7. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee had incurred an amount of Rs.2,50,000/- during the AY 2008-09 being the sum paid to the Registrar of Companies as fee for increasing authorised share capital of the company from Rs.50,00,000/- to Rs. 5,00,00,000/-. The company instead of debiting the entire amount of Rs.2,50,000/- in that preceding year preferred to spread the expenditure for five years. According to the assessee, the payment of fees paid to ROC has got no bearing with the owning of property and as such it cannot be treated as capital expenditure. On appeal, the Ld. CIT(A) has noted that the amount in question was a statutory fees that was paid by the assessee to ROC for increasing the authorised share capital. The expenditure was incurred in the preceding assessment year and the Ld. CIT(A) took note that sec. 35D(2)(c)(iii) allows for deduction of expenditure 'by way of fees for registering the company under the provisions of the Companies Act, 1956' and was of the opinion that the statutory fees paid for increasing the authorised share capital is nothing but a corollary to the provision and, therefore, the assessee is entitled to one-fifth deduction and, therefore, he deleted the addition. We note that the issue before us is no longer res integra. The fees paid of Rs.2,50,000/- to the Registrar of Companies for increasing its authorised share capital is capital in nature and the Ld. CIT(A) allowed the deduction of expenditure u/s. 35D(2)(c)(iii) of the Act on a wrong footing as held by the Hon'ble Delhi 5 ITA No 1784/Kol/2016 M/s. M. P. Jewellers & Co. (1945) (P) Ltd., AY-2009-10 High Court in the case of CIT Vs. Hindustan Insecticides Ltd. reported in (2001) 250 ITR 338 wherein the Hon'ble High Court has held as under:
Delhi High Court Cites 14 - Cited by 38 - A Pasayat - Full Document

Tj Stock Broking Services P. Ltd, Mumbai vs Addl Cit Rg 4(2), Mumbai on 2 November, 2016

9. Brief facts as noted by the AO are that the assessee company paid salary as well as commission to the five directors to the tune of Rs.1,37,91,000/-. The AO noted that the payment of commission was for the first time and was on the basis of resolution dated 07.04.2008 wherein it was resolved to pay commission @ 2% of the turnover achieved by the assessee company since the directors will be rendering extra labour and time. It was noted by the AO that the amount as stated above as commission was shared by the Directors equally. The AO taking note of the resolution passed on 07.04.2018 wondered as to how the Directors as early as in April, 2008 was able to predict substantial increase in the company's turnover and, therefore, according to him, it is nothing but an afterthought decision and the resolution is ante-dated to provide for the alleged commission payments. Though it was brought to the notice of the AO that from the earlier assessment years, the assessee company had increased its turnover quite impressive in this year, however, according to AO, the commission to the directors is about 51.74% of the profit and this is 7 ITA No 1784/Kol/2016 M/s. M. P. Jewellers & Co. (1945) (P) Ltd., AY-2009-10 nothing but siphoning off the windfall gain made by the assessee company on the sudden increase of gold prices in the domestic and international markets. According to AO, the directors are all brothers of the same family and the profit earned could have been disclosed as dividend. However, in order to save the liability of dividend distribution tax, the assessee company has given it in the form of commission and, therefore, by relying on the decision of the Special bench of this Tribunal in M/s. Dalal Brocha Stock Broking (P) Ltd. Vs. Addl. CIT (ITA No. 5792/Mum/2009 dated 22.06.2011) disallowed the claim of assessee. On appeal, the Ld. CIT(A) allowed the claim of the assessee.
Income Tax Appellate Tribunal - Mumbai Cites 6 - Cited by 10 - Full Document
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