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

The facts of the case are the appellant company initially commenced production and activities from 11.12.2012 from its factory at Village Sukhpar, Dist: Surendranagar on completion of required & machineries, construction of factory Building and other required facilities and legal and other formalities. So, the appellant had commenced business from the A.Y, 2013-14, Until, then the plant/project was under construction/acquisition.

The appellant company was incorporated with the capital of Rs. 5,00,000/-, At the time of incorporation, the appellant company had paid Rs. 39.500/- in connection with Registration of Company, MOA & AOA Drafting & Printing etc.

The appellant company had invested Rs, 67.55 Crores in of the project/plant upto 31st March, 2013.

In order to meet the requirement of funds for the completion of the project, the appellant had besides bank loans and other of finance, raised funds by way

For that purpose, appellant had had incurred expenses of Rs, 19,42,500/- by way of MCA(ROC) Filling Fees and Stamp Duty as per the applicable provisions of the in connection with the raising of Authorized Share Capital from Rs. 5.00 Lacs to Rs, 27.00 Crores before the commencement of the business.

The Form 5 is the Form prescribed by the Ministry of Corporate Affairs authorizing the company to increase the authorized capital of the company. The stamp duty is to be paid on Form 5 Filling as per the applicable Stamp Act. The company had to amend MOA altering the clause related to increase Authorized Capital with Form 5.

The company had claimed 1/5th of expenditure of Rs, 39,500/- paid on incorporation as specified in Point Number 3 above and Rs, 19,42,500/- at the time of raising of the authorized capita! U/s. 35D as specified in Point Number 6 above. And ld. A.O termed this above expenditure are of capital nature and same cannot be allowed under Income Tax Act and accordingly made addition of Rs. 3,88,500/-.

Against the said addition, appellant preferred first statutory appeal before the ld. CIT(A) who confirmed the addition made by the ld. A.O.

Now appellant is before us.

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 the 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 the company. And appellant had claimed Rs. 3,96,400/- being 1/5 of the above expenses under section 35D of the Income Tax Act. . 1. Expenses deductible u/s. 35D are 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 the business of the 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: