Commissioner of Income Tax vs State Industries Promotion Corporation of Tamil Nadu

N.K. Jain, J.—The above tax case is at the instance of the Commissioner of Income Tax, Tamil Nadu-II, Madras, u/s 256(2) of the Income

Tax Act, 1961, and the Income Tax Appellate Tribunal has stated the case and referred the following question of law for the assessment year

1984-85, for the opinion of this court :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the fees paid by the assessee to the

Registrar of Companies in connection with the increase of authorised capital of the company should be allowed as a revenue expenditure ?

Learned standing counsel for the Department submits that this court held that the expenditure was considered to be revenue expenditure as per

the decision reported in Commissioner of Income Tax Vs. Kisenchand Chellaram (India) P. Ltd., . But the same has been reversed and held that

this expenditure is to be taken as capital expenditure and is not liable for deduction, by the Supreme Court in Punjab State Industrial Development

Corporation Ltd., Chandigarh Vs. Commissioner of Income Tax, Patiala, and the controversy has been decided in favour of the Revenue.

Despite service, the respondent has not appeared and controverted the legal position.

In view of the above statement and for the reasons mentioned in the decision cited supra, the question of law referred to us is answered in the

negative and in favour of the Revenue, The tax case is disposed of accordingly. No costs.