Expenses incurred on buy back of shares allowed as revenue expenditure

Ocwen Financial Solutions Pvt. Ltd. Vs ACIT (ITAT Bangalore) During the previous year relevant to assessment year, the assessee had spent on buy-back of shares and debited the same to Profit & Loss account. The expenditure was disallowed by the AO in his draft assessment order holding the same to be capital expenditure. Hon’ble High Court of Karnataka in the case of CIT v. Motor Industries Co. Ltd. ITA No.1064/2008 judgment dated 31.10.2014 has held as follows:- “26. The increase in the capital results in expansion of the capital base of the company and incidentally that would...