RNB Overseas Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 215/DEL/2011

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0059 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 21-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES F: NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 215/DEL/2011 ASSESSMENT YEAR: 2006-07 RNB OVERSEAS PVT. LTD., VS. ITO, RNB HOUSE, 1 SHIVAJI ENCLAVE, WARD 15(4), OPPOSITE MOTHERDAIRY, NEAR RAJA GARDEN, NEW DELHI. NEW DELHI. AAACR5753Q (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SH. H.K. LAL, SR. DR ORDER PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS D IRECTED AGAINST THE EX- PARTE ORDER PASSED BY LD. CIT(A) DATED 21 ST OCTOBER, 2010 FOR A.Y. 2006-07. 2. THE ASSESSEE IN ITS APPEAL IS ASSAILING THE ORDE R OF CIT(A) VIDE WHICH AN ADDITION OF RS. 1,38,700/- HAS BEEN CONFIRMED. THE SAID SUM REPRESENTS THE PAYMENT MADE TO THE REGISTRAR OF COMPANIES FOR FILING FEES FOR INCREASE IN AUTHORIZED CAPITAL. IT IS THE CASE OF THE ASSES SEE THAT IT IS IN THE NEED OF MORE WORKING CAPITAL AND HENCE THE INCREASE IN THE AUTHORIZE SHARE CAPITAL WAS SOUGHT ON WHICH AFOREMENTIONED AMOUNT HAS BEEN PAID AS FEE WHICH IS ALLOWABLE AS HAVING BEEN INCURRED FOR THE PURPOSE O F BUSINESS. THE AO HAS REJECTED THE CLAIM OF THE ASSESSEE. LD. CIT(A) ALS O HAS UPHELD THE ADDITION ITA NO. 215/D/2011 2 OF THE SAID AMOUNT BY FOLLOWING THE DECISIONS OF HO NBLE SUPREME COURT NAMELY PUNJAB STATE INDUSTRIAL DEVELOPMENT CORPORAT ION LTD. VS. CIT 225 ITR 792 AND BROOKE BOND INDIA VS. CIT 225 ITR 798. 3. THE APPEAL OF THE ASSESSEE WAS FIXED FOR 21.3.11 AS PER DATE DULY NOTED BY THE LD. AR OF THE ASSESSEE. HOWEVER, ON T HE FIXED DATE OF HEARING NONE WAS PRESENT ON BEHALF OF ASSESSEE. AS THE ISS UE IS COVERED BY THE AFOREMENTIONED DECISIONS OF HONBLE SUPREME COURT, WE PROCEED TO DECIDE THE PRESENT APPEAL EX-PARTE QUA THE ASSESSEE AFTER HEARING LD. DR. 4. LD. DR AFTER NARRATING THE FACTS AND RELYING UPO N THE ORDER OF CIT(A) AND AO PLEADED THAT THE ISSUE IS DIRECTLY COVERED B Y THE AFOREMENTIONED TWO DECISIONS, HENCE THE APPEAL FILED BY THE ASSESS EE SHOULD BE DISMISSED. 5. WE HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R, ORDER OF CIT(A) AND THE SUBMISSION OF LD. DR. THE ASSESSEE IS CLAI MING THE EXPENDITURE OF AMOUNT PAID BY IT TO THE REGISTRAR OF THE COMPANIES FOR INCREASING THE AUTHORIZE CAPITAL. THE CLAIM OF THE ASSESSEE IS TH AT AS PER REQUIREMENTS OF ITS BUSINESS THE WORKING CAPITAL WAS TO BE ENHANCED , THEREFORE, IT WAS A NECESSARY EXPENDITURE TO BE INCURRED FOR THE PURPOS E OF BUSINESS WHICH IS ALLOWABLE AS PER SEC. 37 OF THE ACT. THIS ISSUE HA S BEEN CONSIDERED BY LD. CIT(A) AND REFERRING TO AFOREMENTIONED TWO DECISION S OF HONBLE SUPREME COURT. HE HAS OBSERVED THAT THIS VERY ISSUE WAS CO NSIDERED BY HONBLE SUPREME COURT AND IT WAS OBSERVED AS UNDER: - ITA NO. 215/D/2011 3 THOUGH THE INCREASE IN THE CAPITAL RESULTS IN EXPAN SION 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 INCURR ED IN THAT CONNECTION STILL RETAIN THE CHARACTER OF A CAP ITAL EXPENDITURE SINCE THE EXPENDITURE IS DIRECTLY RELAT ED TO THE EXPANSION OF THE CAPITAL BASE OF THE COMPANY. 6. IN VIEW OF THE ABOVE OBSERVATION OF HONBLE SUPR EME COURT, THE CLAIM OF ASSESSEE REGARDING ALLOWABILITY OF THESE E XPENDITURES HAS RIGHTLY BEEN REJECTED BY LD. CIT(A). HIS ORDER BEING IN AC CORDANCE WITH DECISION OF APEX COURT, IS SUSTAINED. THE APPEAL FILED BY THE ASSESSEE BEING DEVOID ON MERITS IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25.3.11 SD/- SD/- (K.G. BANSAL) (I.P. BANSAL) ACCOUNTANT MEMBE R JUDICIAL MEMBER * KAVITA DATED: 25.3.11 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT