PTC Energy Limited, New Delhi V. DCIT, New Delhi

ITA 6136/DEL/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9003 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 18-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: SANAT KAPUR
• Keywords: Capital expenditure
• Section: 143(3)

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6136/DEL/2015 (ASSESSMENT YEAR: 2012 - 13 ) PTC ENERGY LIMITED, 2 ND FLOOR, NBCC TOWER, 15, BHIKAJI CAMA PLACE, NEW DELHI PAN: AAECP7884J VS. DCIT, CIRCLE - 14(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANAT KAPUR, ADV REVENUE BY: SHRI SURENDER PAL, SR. DR DATE OF HEARING 10/12 / 2018 DATE OF PRONOUNCEMENT 1 1 / 12 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - 7, NEW DELHI DATED 11.09.2015 FOR THE ASSESSMENT YEAR 2012 - 13. THE SOLITARY ISSUE IN THIS APPEAL IS THAT WHETHER RS. 41 LAKHS CLAIMED BY THE ASSESSEE OF EXPENDITURE FOR INCREASE IN AUTHORIS ED SHARE CAPITAL OF THE COMPANY TO THE REGISTRAR OF COMPANIES IS ALLOWABLE AS DEDUCTION U/S 35D OF THE ACT OR NOT. 2. THE LD AO EXAMINED THE RETURN OF INCOME FILED BY THE ASSESSEE ON 26.09.2012, WHEREIN, INCOME OF RS. 39202630/ - WAS DECLARED AND HE FOUND THAT THE ASSESSEE HAS INCURRED RS. 22268000/ - FOR ROC FEES FOR INCREASE OF AUTHORISED CAPITAL DURING THE FINANCIAL YEA R 2008 - 09 AND FOR THIS YEAR HAS CLAIMED 1/5 TH OF THE SAME I.E. RS. 41 LAKHS AS DEDUCTION U/S 35D OF THE ACT. THE LD AO NOTED THAT SUCH EXPENDITURE IS A CAPITAL EXPENDITURE, THEREFORE, HE DISALLOWED THE ABOVE CLAIM AND PASSED AN ASSESSMENT ORDER U/S 143(3) OF THE ACT ON 02.03.2015 DETERMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 44472760/ - . ITA NO. 6136/DEL/2015 (ASSESSMENT YEAR: 2012 - 13) PTC ENERGY LIMITED VS DCIT, PAGE | 2 3. THE ASSESSEE AGGRIEVED WITH THE ORDER HAS PREFERRED AN APPEAL BEFORE THE LD CIT(A) WHO CONFIRMED THE DISALLOWANCE HOLDING THAT FEES PAID TO REGISTRAR OF COMPANIES FOR INCREASE IN AUTHORISED CAPITAL IS A CAPITAL EXPENDITURE. THEREFORE, ASSESSEE AGGRIEVED WITH THE ORDER HAS PREFERRED AN APPEAL BEFORE US. 4. THE LD AR SUBMITTED THAT THE ASSESSEE HAS PAID RS. 22268000/ - TO REGISTRAR OF COMPANY FOR FEES AND STAMPING CHARGES F OR INCREASE OF AUTHORISED SHARE CAPITAL DURING THE FINANCIAL YEAR 2008 - 09 RELEVANT TO ASSESSMENT YEAR 2009 - 10. DURING THE YEAR THE ASSESSEE HAS CLAIMED 1/5 TH OF THE SAME U/S 35D OF THE ACT. HE SUBMITTED THAT THOUGH THE ABOVE EXPENDITURE HAS BEEN HELD TO BE AN CAPITAL EXPENDITURE , HOWEVER, SAME IS ALLOWABLE AS DEDUCTION U/S 35D OF THE ACT. HE FURTHER RELIED UPON THE DECISION OF THE JODHPUR BENCH IN CASE OF NEELU TEXTILES LTD VS. CIT 128 TAXMANN 93 AND SUBMITTED THAT ISSUE IS SQUARELY COVERED IN FAVOUR O F THE ASSESSEE. 5. THE LD DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND STATED THAT ABOVE IS THE CAPITAL EXPENDITURE BASED ON TWO DIFFERENT DECISIONS OF THE SUPREME COURT. THE LOWER AUTHORITIES CORRECTLY DISALLOWED THE SAME. HE FURTHER STATED THAT THE DECI SION OF THE JODHPUR BENCH IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ADMITTEDLY DURING THE FY 2008 - 09 THE ASSESSEE HAS INCURRED EXPENDITURE O F RS. 22268000/ - AS FEES TO REGISTRAR OF COMPANIES FOR INCREASE IN AUTHORISED SHARE CAPITAL. IN THIS YEAR THE ASSESSEE HAS CLAIMED 1/5 TH OF THE ABOVE EXPENDITURE AS DEDUCTION U/S 35D OF THE ACT RELYING UPON THE DECISION OF THE JODHPUR BENCH. APPARENTLY ON A QUERY BY THE BENCH HOW ABOVE EXPENDITURE IS COVERED U/S 35D OF THE ACT OR NOT , THE LD AR SUBMITTED THAT SAME IS COVERED U/S 35D(2)(C)( I ) AS LEGAL CHARGES IN DRAFTING THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANIES. WE ARE OF THE OPINION THAT FEES PAID TO REGISTRAR OF COMPANIES IS A CAPITAL EXPENDITURE NOT COVERED UNDER ANY OF THE CLAUSE ITA NO. 6136/DEL/2015 (ASSESSMENT YEAR: 2012 - 13) PTC ENERGY LIMITED VS DCIT, PAGE | 3 U/S 35D(2)(C) OF THE ACT UNLESS IT IS I N CONNECTION WITH THE ISSUE FOR PUBLIC SUBSCRIPTION AS HAS BEEN HELD BY THE COORDINATE BENCH FOLLOWING THE DECISION OF THE HON'BLE RAJASTHAN HIGH COURT 188 ITR 151. SUCH IS NOT THE CASE BEFORE US , AS THE ASSESSEE HAS NOT INCURRED THIS EXPENDITURE IN CONNEC TION WITH THE ISSUE FOR THE PUBLIC SUBSCRIPTION. ACCORDINGLY, WE FIND NO MERIT IN THE APPEAL OF THE ASSESSEE AND ALL THE GROUNDS AGITATED ARE DISMISSED. 7. ACCORDINGLY, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 1 / 12 / 2018 . - SD/ - - SD/ - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 1 / 12 / 2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI