Indus Biotech Limited Vs ACIT (ITAT Pune)
In the matter abovementioned ITAT deleted addition made on account of expenditure incurred for initial public offering (IPO) which was subsequently aborted. ITAT held that this expenditure is allowable being revenue in nature.
Assessee engaged in manufacturing of botanical drugs, exercise physiology, active botanical ingredients and animal nutrition / pet health, etc. Assessee filed its return at Rs.27,61,96,070/- u/s 139 (1) and Rs.66,04,43,182/- u/s 115JB. CPC issued an intimation u/s 143(1) wherein the various adjustments were made to the income of Rs. 28,40,96,940/-.
Before CIT (A) It was submitted that expenditure of Rs.1,17,25,562/- relates to the IPO expenses in respect of abandoned / aborted project which is revenue in nature. Reliance was placed on the decision of Hon’ble Bombay High Court in the case of Nimbus Communication Ltd. in ITA No.4244/2010. CPC made adjustment due to variation between the value reported by the tax auditor in Form No.3CD to that of the entry in the ITR where auditor had qualified that the IPO cost of Rs.1,17,25,562/- in column No.21(a)(2), to be capital in nature. CIT (A) rejected the contention of the assessee and dismissed the appeal. Before ITAT both parties supported their earlier contentions.
