ASTRON PAPER & BOARD MILL LIMITED,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-1(1)(4),, AHMEDABAD

The assessee has raised following ground of appeal:-

The fact in brief is that return of income declaring income of Rs. nil was filed on 30th March, 2016. The case was subject to scrutiny assessment and notice u/s. 143(2) of the Act was issued on 28th July, 2016. During the course of assessment on examination of P & L A/c, the Assessing Officer noticed that assessee had claimed preliminary expenses as written off to the amount of Rs. 4,58,900/-. On perusal of the detail of expenditure, the Assessing Officer observed that the expenses claimed were in relation to increase of authorized share capital of the assesssee’s company and he was of the view that expenses incurred for increase in authorized share capital was not an allowable expenses even u/s. 35D of the Act. Therefore, claim of expenses amounting to Rs. 4,58,900/- claimed as preliminary expenses was disallowed and added to the total income of the assessee.

The assessee has preferred appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.

During the course of appellate proceedings before us, the ld. counsel brought to our notice that Co-ordinate Bench of the ITAT has adjudicated the similar issue on identical facts in favour of the assessee vide for assessment year 2013-14 on 31st May, 2018. The ld. Departmental Representative is fair enough not to controvert these undisputed fact that the issue in the appeal is covered by the decision of Co- ordinate Bench of the ITAT as cited by the ld. counsel.

With the assistance of ld. representatives, we have gone through the decision of the Co-ordinate Bench of the ITAT in the case of the assessee Page No 3 Astron Paper & Board Mill Ltd. vs. ITO itself adjudicated vide on 31st May, 2018. The relevant part of the decision discussed in the above cited decision is as under:- “12. We have gone through the relevant record in the impugned order. The appellant had been engaged in the business of manufacturing of Kraft Paper. And appellant before die commencement of business had incurred expenses of Rs. 39,500/- in connection with Registration of Company, MO A & AOA Drafting & Printing etc. and Rs. 19,42,500/- in connection Registration and Stamp Duty Charges for Increase in the Authorised Capital of the Company for the commencement of the project of die company. And appellant had claimed Rs. 3,96,400/- being 1/5 of die above expenses under section 35D of die Income Tax Act. . 1. Expenses deductible u/s. 35D arc any expenditure incurred in connection with 1. Preparation of a feasibility report. 2. Preparation of a project report. 3. Conducting a market survey or any other survey necessary for the business of the assessee. 4. Engineering services relating to die business of die assessee. 2. Legal charges for drafting any agreement between the assessee and any other person relating to the or conduct of the business of the assessee. 3. Where the assessee is a company, also, expenditure:

In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 19-02-2021