Commissioner of Income Tax vs Ranbaxy Laboratories Ltd.

By this petition u/s 256(2) of the Income Tax Act, 1961, the Revenue seeks a direction to the Income Tax Appellate Tribunal to state the case and refer the following question, stated to be one of law, arising out of I. T. A. No. 9623/D of 1990, for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in deleting the disallowance of Rs. 11,68,964 despite the fact that expenses incurred in raising equity share capital are capital in nature and are Therefore inadmissible, whether they are incurred in advance or in the year of conversion from debenture to equity share ?"

In our opinion a question of law does arise out of the order of the Tribunal. We accordingly, direct the Tribunal to state the case and refer the following question for our opinion :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing 25 per cent, of the amount of total expenditure incurred by the assessed in connection with the issue of 13.5 per cent, secured convertible debentures ?"

The petition stands disposed of with no order as to costs.