This is premium content. Please become a Premium member. If you are already a member, login here to access the full content.
Section 35D Capital employed do not include Share premium: SC
Case Law Details
- Case Name
- M/s Berger Paints India Ltd. Vs CIT (Supreme Court of India)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 1996-97 and 1997-98
- Courts
- Supreme Court of India
Upgrade to Basic or Premium to download.
Already Upgraded? Log in.
Advertisement
Hon’ble SC held that “Share Premium Amount” collected by the Company on its subscribed issued share capital is not and cannot be said to be the part of “capital employed in the business of the Company” for the purpose of Section 35D(3)(b) of the Act and hence the appellant-Company was rightly held not entitled to claim any deduction in relation to the amount received towards premium from its various shareholders on the issued shares of the Company.
1) These appeals are filed against the final judgment and orders dated 15.05.2006 passed by the Hig...
OFFHAND
In advancing the arguments, the Attorney General has relied upon certain provisions of the Companies Act dealing with ‘share capital’ and ‘paid-up capital’. However, the term used in sec 35D is “ISSUED share capital” (FONT supplied); not either of the other two mentioned wording. The fine point of distinction will be better perceived and incisively appreciated if the Companies Act provisions are closely gone through; with the necessary emphasis due, on the prefix ‘ISSUED’.
It is observed that, as per the Experts’ commentary in Kanga & Palkhivala’s Text Book (Tenth Edition, Volume I, pg. 883), the view the HC had taken has been opined to be “incorrect as it failed to note that share premium is treated on par with capital under the Companies Act, 1956”.
For any further study, debate and independent deliberation in legal circles, the above input may be found useful.