Case Law Details

Case Name : The Commissioner of Income Tax Vs M/s. Nimbus Communications Limited (Bombay High Court)
Appeal Number : Income Tax Appeal No. 4244 of 2010
Date of Judgement/Order : 08/12/2011
Related Assessment Year :
Courts : All High Courts (3701) Bombay High Court (671)

CIT Vs.Nimbus Communications Limited (Bombay HC) –  there is dispute that the assessee has in fact incurred the expenditure and that on account of the aborted public issue offer, no new asset has come into existence and consequently there is no question of the assessee getting any enduring benefit. With the approval of SEBI, the assessee was to increase the share capital and thereby promote its business activity. However, the same got aborted due to reasons beyond its control. In these circumstances, in view of the decision of this Court in the case of Commissioner of Income Tax V/s. M/s. Essar Oil Limited, Income Tax Appeal (L) No.921 of 2006 decided on 16th October 2008, in our opinion, no fault can be found with the decision of the Income Tax Appellate Tribunal in allowing the aborted share issue expenditure under Section 37 of the Income Tax Act, 1961.

HIGH COURT OF BOMBAY
INCOME TAX APPEAL NO. 4244 OF 2010

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The Commissioner of Income Tax
Versus

M/s. Nimbus Communications Limited

DATE : 8th December 2011

ORDER

1. Whether the Income Tax Appellate Tribunal was justified in holding that the expenditure on share issue incurred by the assessee is a revenue expenditure and, hence, allowable under Section 37 of the Income Tax Act, 1961 is the question raised in this appeal.
2. The finding of fact recorded by the Income Tax Appellate Tribunal is that there is dispute that the assessee has in fact incurred the expenditure and that on account of the aborted public issue offer, no new asset has come into existence and consequently there is no question of the assessee getting any enduring benefit. With the approval of SEBI, the assessee was to increase the share capital and thereby promote its business activity. However, the same got aborted due to reasons beyond its control. In these circumstances, in view of the decision of this Court in the case of Commissioner of Income Tax V/s. M/s. Essar Oil Limited, Income Tax Appeal (L) No. 921 of 2006 decided on 16th October 2008, in our opinion, no fault can be found with the decision of the Income Tax Appellate Tribunal in allowing the aborted share issue expenditure under Section 37 of the Income Tax Act, 1961.

3. Accordingly, the appeal is dismissed with no order as to costs.

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Category : Income Tax (25154)
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Tags : high court judgments (4006)

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