Case Law Details
ACIT Vs. Nicholas Piramal India Ltd. (ITAT Mumbai)
We notice that assessee has incurred consultancy charges to list the ‘ADR’ in ‘NYSE’ and later dropped this project. The AO treated the expenditure as capital and disallowed the same and simultaneously, invoked provision of section 40(a)(i) and 195 of the Act. We notice that in the similar situation, the Hon’ble Bombay High Court in the case of Nimbus Communications Ltd.(supra) has treated the capital expenditure of share issue expenses, which ultimately aborted public issue. The expenditure does not have enduring benefit to the assessee and allowed these expenses as revenue expenditure by relying on CIT vrs. Essar Oil Ltd. case (ITA No. 921 of 2006) dated 16.10.2008 since the issue before is similar. Therefore, the ground raised by revenue is accordingly.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal has been filed by the revenue against the order of Ld. Commissioner of Income Tax (Appeals)-XIX, Mumbai in short ‘Ld. CIT(A)’ dated 31.12.2004 for AY 200102.
2. The brief facts of the case are, the assessee is engaged in the business of manufacturing and sale of pharmaceuticals. Assessee filed its return of income showing total income of Rs. 116,592,027/- and deemed income u/s 115JB of the Act at Rs. 646,930,776/- was filed on 31.10.01 alongwith audit report u/s 44AB, audited statement of accounts and director’s report for the year ended 31.03.2000. The return was processed u/s 143(1) on 28.02.03. Subsequently, the case was selected for scrutiny and notice u/s.143(2) and 142(1) of the I.T. Act, 1961 were issued and served upon the assessee. In response, assessee filed relevant information as called for and after considering the detailed submission of assessee, AO rejected the contention of assessee and made disallowance.
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