Brooke Bond India Ltd. v. CIT

225 ITR 798Supreme Court of India1997#390 most cited

What is Brooke Bond India Ltd. v. CIT authority for?

Expenditure incurred for increasing a company's share capital or expanding its capital base, such as expenses related to the issue of shares, constitutes capital expenditure. Such expenses are not deductible as revenue expenditure under Section 37(1) of the Income-tax Act, 1961, even if they incidentally benefit the business.

228

judgments rely on this decision, according to BharatTax’s citation analysis of 367,368 Indian tax judgments — from 2006 to 2026.

Also referred to as

Brooke Bond India Ltd. v. CIT · Section 37(1) · capital expenditure · revenue expenditure · share issue expenses · increase in capital · capital base expansion · deductibility · professional fees · enduring benefit

Also reported as

91 Taxmann 26

Sections most often in play

Section 37(1)Section 143(3)Section 14ASection 10BSection 28Section 35DSection 43(5)Section 143(1)
Read the full judgment

Issues it is cited on

section 35dspeculation losssection 43(5)strategic investmentenduring benefitsection 35capital expenditurerevenue expendituredisallowance under section 14abook profitscommercial expediencysection 37(1)

Judgments citing Brooke Bond India Ltd. v. CIT

DCIT, Gurgaon vs. Orient Craft Ltd., New Delhi

ITA 3202/DEL/2017[2011-12]Status: DisposedITAT Delhi20 Mar 2026AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Salil Aggarwal, Sr. AdvFor Respondent: Ms. Monika Singh, CIT(DR)
Section 10BSection 14A

…case. 2 That both CIT(A) & AO have erred in law and on facts in treating, IPO expenses amounting to Rs. 1,68,30,430/- as capital expenditure arbitrarily and without any justification.It is contended that the ratio of the judgements in case of 225 ITR 792 and 225 ITR 798 are not applicable to the appellant's case. 3 The above grounds of appeal are independent and without prejudice to one and another. ITA No.- 3626/Del/2015(A.Y. 2010-11) Assessee’s appeal 1 That the orders passed by lower authorities are bad in law and against the facts & circumstances of the case. 2 That both CIT(A) & AO have erred in law and on…

DCIT, New Delhi vs. M/S Orient Craft Ltd., New Delhi

In the result the appeal of the assessee in ITA No:- 3625/Del/2015 and

ITA 3774/DEL/2015[2010-11]Status: DisposedITAT Delhi20 Mar 2026AY 2010-11

Bench: Shri Satbeer Singh Godara, And

For Appellant: Shri Salil Aggarwal, Sr. AdvFor Respondent: Ms. Monika Singh, CIT(DR)
Section 10BSection 14A

…case. 2 That both CIT(A) & AO have erred in law and on facts in treating, IPO expenses amounting to Rs. 1,68,30,430/- as capital expenditure arbitrarily and without any justification.lt is contended that the ratio of the judgements in case of 225 ITR 792 and 225 ITR 798 are not applicable to the appellant's case. 3 The above grounds of appeal are independent and without prejudice to one and another. ITA No.- 3626/Del/2015(A.Y. 2010-11) Assessee’s appeal 1 That the orders passed by lower authorities are bad in law and against the facts & circumstances of the case. 2 That both CIT(A) & AO have erred in law and…

DCIT, New Delhi vs. M/S. Orient Craft Ltd., New Delhi

ITA 3773/DEL/2015[2009-10]Status: DisposedITAT Delhi20 Mar 2026AY 2009-10

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Salil Aggarwal, Sr. AdvFor Respondent: Ms. Monika Singh, CIT(DR)
Section 10BSection 14A

…case. 2 That both CIT(A) & AO have erred in law and on facts in treating, IPO expenses amounting to Rs. 1,68,30,430/- as capital expenditure arbitrarily and without any justification.It is contended that the ratio of the judgements in case of 225 ITR 792 and 225 ITR 798 are not applicable to the appellant's case. 3 The above grounds of appeal are independent and without prejudice to one and another. ITA No.- 3626/Del/2015(A.Y. 2010-11) Assessee’s appeal 1 That the orders passed by lower authorities are bad in law and against the facts & circumstances of the case. 2 That both CIT(A) & AO have erred in law and on…

M/S. Orient Craft Ltd., New Delhi vs. DCIT, New Delhi

ITA 3626/DEL/2015[2010-11]Status: DisposedITAT Delhi20 Mar 2026AY 2010-11

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Salil Aggarwal, Sr. AdvFor Respondent: Ms. Monika Singh, CIT(DR)
Section 10BSection 14A

…case. 2 That both CIT(A) & AO have erred in law and on facts in treating, IPO expenses amounting to Rs. 1,68,30,430/- as capital expenditure arbitrarily and without any justification.It is contended that the ratio of the judgements in case of 225 ITR 792 and 225 ITR 798 are not applicable to the appellant's case. 3 The above grounds of appeal are independent and without prejudice to one and another. ITA No.- 3626/Del/2015(A.Y. 2010-11) Assessee’s appeal 1 That the orders passed by lower authorities are bad in law and against the facts & circumstances of the case. 2 That both CIT(A) & AO have erred in law and on…

M/S. Orient Craft Ltd., New Delhi vs. DCIT, New Delhi

ITA 3625/DEL/2015[2009-10]Status: DisposedITAT Delhi20 Mar 2026AY 2009-10

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Salil Aggarwal, Sr. AdvFor Respondent: Ms. Monika Singh, CIT(DR)
Section 10BSection 14A

…case. 2 That both CIT(A) & AO have erred in law and on facts in treating, IPO expenses amounting to Rs. 1,68,30,430/- as capital expenditure arbitrarily and without any justification.It is contended that the ratio of the judgements in case of 225 ITR 792 and 225 ITR 798 are not applicable to the appellant's case. 3 The above grounds of appeal are independent and without prejudice to one and another. ITA No.- 3626/Del/2015(A.Y. 2010-11) Assessee’s appeal 1 That the orders passed by lower authorities are bad in law and against the facts & circumstances of the case. 2 That both CIT(A) & AO have erred in law and on…

Zarah Rafique Malik, Mumbai vs. ITO (Int Tax) Ward-3(2)(1), Mumbai

ITA 5159/MUM/2025[2022-23]Status: DisposedITAT Mumbai10 Mar 2026AY 2022-23

Bench: Justice (Retd.) C V Bhadang, Hon’Ble & Shri Vikram Singh Yadav, Hon’Blezarah Rafique Malik Income Tax Officer, (Int.Tax) B/1703, Vivarea Condominium, Ward- 3(2)(1), Mumbai Vs. Sane Guruji Marg, Jacob Circle, Mahalaxmi East Mumbai – 400 011 Pan : Adcpm8960G (Appellant) (Respondent)

For Appellant: Shri K Gopal, Adv. & Shri Oom KandalkarFor Respondent: Shri Krishna Kumar, Sr. DR
Section 120(4)(b)Section 127Section 143(2)Section 143(3)Section 144BSection 153(1)

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “I”, MUMBAI Before Justice (Retd.) C V Bhadang, Hon’ble President & Shri Vikram Singh Yadav, Hon’ble Accountant Member Zarah Rafique Malik Income Tax Officer, (INT.TAX) B/1703, Vivarea Condominium, Ward- 3(2)(1), Mumbai Vs. Sane Guruji Marg, Jacob Circle, Mahalaxmi East Mumbai – 400 011 PAN : ADCPM8960G (Appellant) (Respondent) Appellant By : Shri K Gopal, Adv. & Shri Oom Kandalkar Respondent By : Shri Krishna Kumar, Sr. DR Date of Hearing : 21.01.2026 Date of Pronouncement: 10.03.2026 O R D E R PER VIKRAM SINGH YADAV, A.M : By this appeal, appellant-assessee…

Sri Rama Agri Genetics (India) Private Limited, Kurnool vs. DCIT., Circle-1, Kurnool

In the result, the appeal of the assessee is partly allowed

ITA 1179/HYD/2025[2015-16]Status: DisposedITAT Hyderabad21 Jan 2026AY 2015-16
Section 142(1)Section 143(3)Section 201Section 263Section 36(1)(iii)Section 36(1)(va)Section 41(1)Section 68

…allowed. The A.O., after considering the submissions of the assessee and also by following the decision of Hon'ble Supreme Court in the case of Punjab State Industrial Development Corporation Limited Vs. CIT, 225 ITR 792 and Brooke Bond India Limited Vs. CIT, 225 ITR 798, disallowed ROC charges paid of Rs. 5,72,481/- on the ground that, the expenditure incurred towards increase in authorised capital of the assessee company is capital in nature and the same cannot be allowed under Section 37(1) of the Income-tax Act, 1961. 9. On appeal, the Ld. CIT(A) allowed partial relief to the assessee on the ground that, on p…

Fairbridge Capital Private Limited, Mumbai vs. Principal Commissioner of Income-Tax, Mumbai - 6, Mumbai, Maharashtra

In the result, appeal of the assessee is allowed

ITA 3626/MUM/2025[2020-21]Status: DisposedITAT Mumbai24 Oct 2025AY 2020-21

Bench: Shri Saktijit Dey, Hon'Ble & Shri Narendra Kumar Billaiya, Hon'Ble

For Appellant: Ms. Chandni Shah a/w Mr. Hardik Nirmal andFor Respondent: Shri Vivek Perampurna, CIT, D/R [virtually
Section 143(3)Section 263

…and not its income. ESOP expenses are not relatable the profit and gains arising or accruing from a business/trade. The Apex Court decision in the case of Punjab State Industrial Development Corp. Ltd. (1997) 225 ITR 792 (SC) and Brooke Bond India Ltd. (1997) 225 ITR 798 (SC) have held that expenditure resulting in "increase in capital" is not allowable deduction even if such expenditure may incidentally help in the business of the company. There is no specific provision for such deduction from section 30 to 36 of the Income Tax Act, 1961. So the residuary section 37 only comes to play and primary condition for a…

Addl CIT Ltu, Mumbai vs. Bajaj Holding & Investment Ltd ( Foremerly Known As Bajaj Auto Ltd), Mumbai

In the result, appeal filed by the revenue is dismissed and appeal filed by the assessee stands partly allowed as indicated hereinabove

ITA 5510/MUM/2012[2007-08]Status: DisposedITAT Mumbai26 Aug 2025AY 2007-08

Bench: Smt. Beena Pillai () & Shri Renu Jauhri ()

Section 14ASection 80

…IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) AND SHRI RENU JAUHRI (ACCOUNTANT MEMBER) I.T.A. No. 5510/Mum/2012 Assessment Year: 2007-08 Asst. Commissioner of Vs. M/s. Bajaj Holding & Income-Tax, Investment Ltd. Large Tax Payer Unit, (Formerly Known as Centre-1, 28th Floor, Bajaj Auto Ltd. World Trade Centre, Bajaj Bhavani, Cuffe Parade, 226, Nariman Point, Mumbai-400005. Mumbai-400021. PAN: AAACB3370K (Appellant) (Respondent) I.T.A. No. 5652/Mum/2012 Assessment Year: 2007-08 M/s. Bajaj Holding & Vs. Asst. Commissioner Investment Ltd. of Income-Tax, (Formerly…

Avitel Post Studioz Limited, Mumbai vs. Deputy Commissioner of Income Tax, Circle 6(1)(2), Mumbai

ITA 5242/MUM/2024[2012-13]Status: DisposedITAT Mumbai24 Jul 2025AY 2012-13

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 143(3)Section 148Section 37(1)

…e same reasoning given by the ld. AO qua each of the payment made to the professionals, he held that payment to professional fees are capital in nature and relied upon the judgment of the Hon’ble Supreme Court in the case of Brook bond India Ltd., reported in 225 ITR 798. 7 Avital Post Studioz Limited 11. Before us, ld. Counsel submitted that the disallowance is wholly unwarranted and unsupported by facts or law. Each item of expenditure is demonstrably incurred for legitimate business purposes, wholly and exclusively, without resulting in acquisition of any capital asset or enduring benefit. The details of each…

M/S Inditrade Capital Ltd (Previously Known As "Jrg Securities Ltd"), Kochi vs. The ITO, Corporate Ward1(1), Kochi

In the result, the appeal filed by the assessee stands allowed

ITA 243/COCH/2023[2017-18]Status: DisposedITAT Cochin14 May 2025AY 2017-18

Bench: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail

For Appellant: Sri.Aneesh Vishwanathan, CAFor Respondent: Smt.Leena Lal, Senior AR
Section 143(3)Section 32(1)(ii)

…022. The learned CIT(A) also confirmed the disallowance of expenditure incurred in connection with the proposed rights issue of Rs.1,18,19,512, placing reliance on the judgment of the Hon’ble Supreme Court in the case of Brook Bond India Limited v. CIT (1997) 225 ITR 798 (SC) and CIT v. Kodak India Limited (2002) 253 ITR 445 (SC). However, directed the AO to delete the addition on account of audit fees of Rs.41 lakh. The learned CIT(A) also confirmed the disallowance of depreciation on account of non- compete fee paid relying upon the decision of the Hon’ble Delhi High Court in the case of Sharp Business Solution…

M/S Inditrade Capital Ltd (Previously Known As, Kochi vs. The ITO, Corporate Ward1(1), Kochi

In the result, the appeal filed by the assessee stands allowed

ITA 242/COCH/2023[2014-15]Status: DisposedITAT Cochin14 May 2025AY 2014-15

Bench: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail

For Appellant: Sri.Aneesh Vishwanathan, CAFor Respondent: Smt.Leena Lal, Senior AR
Section 143(3)Section 32(1)(ii)

…022. The learned CIT(A) also confirmed the disallowance of expenditure incurred in connection with the proposed rights issue of Rs.1,18,19,512, placing reliance on the judgment of the Hon’ble Supreme Court in the case of Brook Bond India Limited v. CIT (1997) 225 ITR 798 (SC) and CIT v. Kodak India Limited (2002) 253 ITR 445 (SC). However, directed the AO to delete the addition on account of audit fees of Rs.41 lakh. The learned CIT(A) also confirmed the disallowance of depreciation on account of non- compete fee paid relying upon the decision of the Hon’ble Delhi High Court in the case of Sharp Business Solution…

M/S Inditrade Capital Ltd (Previously Known As, Kochi vs. The ITO, Corporate Ward1(1), Kochi

In the result, the appeal filed by the assessee stands allowed

ITA 241/COCH/2023[2013-14]Status: DisposedITAT Cochin14 May 2025AY 2013-14

Bench: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail

For Appellant: Sri.Aneesh Vishwanathan, CAFor Respondent: Smt.Leena Lal, Senior AR
Section 143(3)Section 32(1)(ii)

…022. The learned CIT(A) also confirmed the disallowance of expenditure incurred in connection with the proposed rights issue of Rs.1,18,19,512, placing reliance on the judgment of the Hon’ble Supreme Court in the case of Brook Bond India Limited v. CIT (1997) 225 ITR 798 (SC) and CIT v. Kodak India Limited (2002) 253 ITR 445 (SC). However, directed the AO to delete the addition on account of audit fees of Rs.41 lakh. The learned CIT(A) also confirmed the disallowance of depreciation on account of non- compete fee paid relying upon the decision of the Hon’ble Delhi High Court in the case of Sharp Business Solution…

M/S Inditrade Capital Ltd (Previously Known As, Kochi vs. The ITO, Corporate Ward1(1), Kochi

In the result, the appeal filed by the assessee stands allowed

ITA 240/COCH/2023[2012-13]Status: DisposedITAT Cochin14 May 2025AY 2012-13

Bench: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail

For Appellant: Sri.Aneesh Vishwanathan, CAFor Respondent: Smt.Leena Lal, Senior AR
Section 143(3)Section 32(1)(ii)

…022. The learned CIT(A) also confirmed the disallowance of expenditure incurred in connection with the proposed rights issue of Rs.1,18,19,512, placing reliance on the judgment of the Hon’ble Supreme Court in the case of Brook Bond India Limited v. CIT (1997) 225 ITR 798 (SC) and CIT v. Kodak India Limited (2002) 253 ITR 445 (SC). However, directed the AO to delete the addition on account of audit fees of Rs.41 lakh. The learned CIT(A) also confirmed the disallowance of depreciation on account of non- compete fee paid relying upon the decision of the Hon’ble Delhi High Court in the case of Sharp Business Solution…

M/S Inditrade Capital Ltd (Previously Known As, Kochi vs. The ITO, Corporate Ward1(1), Kochi

In the result, the appeal filed by the assessee stands allowed

ITA 239/COCH/2023[2011-12]Status: DisposedITAT Cochin14 May 2025AY 2011-12

Bench: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail

For Appellant: Sri.Aneesh Vishwanathan, CAFor Respondent: Smt.Leena Lal, Senior AR
Section 143(3)Section 32(1)(ii)

…022. The learned CIT(A) also confirmed the disallowance of expenditure incurred in connection with the proposed rights issue of Rs.1,18,19,512, placing reliance on the judgment of the Hon’ble Supreme Court in the case of Brook Bond India Limited v. CIT (1997) 225 ITR 798 (SC) and CIT v. Kodak India Limited (2002) 253 ITR 445 (SC). However, directed the AO to delete the addition on account of audit fees of Rs.41 lakh. The learned CIT(A) also confirmed the disallowance of depreciation on account of non- compete fee paid relying upon the decision of the Hon’ble Delhi High Court in the case of Sharp Business Solution…

Ags Transact Technologies Limited, Mumbai vs. DCIT Circle 6(1)(1), Aayakar Bhavan Mumbai

ITA 4653/MUM/2024[2020-2021]Status: DisposedITAT Mumbai17 Feb 2025AY 2020-2021

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary () Assessment Year: 2020-21 Ags Transact Technologies Dcit Circle 6(1)(1), Ltd., Aayakar Bhavan, Vs. 601-602, Trade World, B Wing Mumbai-400020. S.B. Marg, Lower Parel, Mumbai-400013. Pan No. Aaeca 0901 H Appellant Respondent

For Appellant: Mr. Dalpat ShahFor Respondent: 04/12/2024

…the decision of Supreme 1.3. The said C.I.T.(Appeals) erred in following the decision of Supreme 1.3. The said C.I.T.(Appeals) erred in following the decision of Supreme Court in the case of Brooke Bond India Ltd. 2 Court in the case of Brooke Bond India Ltd. 225 ITR 798 ignoring the 25 ITR 798 ignoring the fact that the said expenditure was towards Legal & Professional Fees, fact that the said expenditure was towards Legal & Professional Fees, fact that the said expenditure was towards Legal & Professional Fees, SEBI Fees, Stock Exchange Fees and not for increase in Autho SEBI Fees, Stock Exchange Fees and not f…

Skill Promoters Holding and Leasing Private Limited, Hyderabad vs. DCIT., Central Circle-2(3), Hyderabad

In the result, appeal filed by the assessee is dismissed

ITA 370/HYD/2023[2019-20]Status: DisposedITAT Hyderabad29 Jan 2025AY 2019-20

Bench: Shri Vijay Pal Rao & Shri Manjunatha G.आ.अपी.सं /Ita No.370/Hyd/2023 (निर्धारण वर्ा/Assessment Year: 2019-20) M/S Skill Promoters Vs. Pcit (Central) Holding & Leasing Hyderabad Private Limited Hyderabad [Pan : Aascs8012P] (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri P.Murali Mohan Rao,Ar रधजस् व द्वधरध/Revenue By: Shri B.Bala Krishna,Cit-Dr सुिवधई की तधरीख/Date Of Hearing: 07/01/2025 घोर्णध की तधरीख/Date Of 29/01/2025 Pronouncement: आदेश / Order Per. Manjunatha G., A.M: This Appeal Filed By The Assessee Is Directed Against The Order Dated 23.06.2023 Of The Learned Principal Commissioner Of Income Tax (Central) (Ld.Pcit), Hyderabad, Pertaining To A.Y.2019-20 On The Following Grounds : 1. The Order Passed U/S 263 Of The Act Dated 23.06.2023 Is Erroneous Both On Facts & In Law. 2. The Ld.Pr.Cit Erred In Holding That The Assessment Order Dated 26.09.2021 Passed U/S 153A Is Erroneous In So 2

For Appellant: Shri P.Murali Mohan Rao,ARFor Respondent: Shri B.Bala Krishna,CIT-DR
Section 127Section 132Section 143(2)Section 153ASection 263Section 37

…t of the Revenue. The relevant findings of the Ld.PCIT are as under : “9. The contentions made by the assessee have been carefully examined and the same are not acceptable for the following reasons . i. In the case of Brooke Bond India Limited vs. CIT (1997) 225 ITR 798, Hon'ble Supreme Court has held as under on the issue under consideration. “Expenditure incurred by your company in connection with issue of shares, with a view to increase their capital is directly related to the expansion of the capital base of the company and is capital expenditure” ii. In view of the above mentioned decisions of Hon'ble Supre…

Indus Biotech Limited, Pune vs. The Assistant Commissioner of Income Tax, Circle 1(1), Pune

Accordingly, this ground is allowed

ITA 122/PUN/2024[2019-20]Status: DisposedITAT Pune10 Jan 2025AY 2019-20

Bench: Shri R. K. Panda & Ms. Astha Chandra

Section 115JSection 143(1)Section 143(1)(a)Section 36(1)(va)Section 37(1)

…IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.122/PUN/2024 Assessment year : 2019-20 Indus Biotech Limited Vs. ACIT Rahul Residency, Plot No.6 & 7, Off Salinke Vihar Road, Kondhwa, Pune – 411048 PAN: AAACI5708E (Appellant) (Respondent) Assessee by Ms. Chandni Shah, Mr. Hardik Nirmal (through virtual) and Ms. Karishma Karda Department by Shri Ramnath P Murkunde Date of hearing 11-12-2024 Date of pronouncement 10-01-2025 ORDER PER R. K. PANDA, VP : This appeal filed by the assessee is directed against the order dated…

Mahanagar Gas Limited, Mumbai vs. Deputy Commissioner of Income Tax, Income Tax

ITA 505/MUM/2024[2021-22]Status: DisposedITAT Mumbai17 Dec 2024AY 2021-22

Bench: Justice (Retd.) Shri C.V. Bhadang & Shri B.R. Baskaran

For Appellant: Shri P.P. JayramanFor Respondent: Shri R.R. Makwana, Sr.DR
Section 143(1)Section 143(3)

…it proves otherwise. The question was whether the assessee was justified in seeking for bifurcation of the expenses incurred into capital and revenue. The Division Bench referred to the decision in the case of Brooke Bond India Ltd. vs. CIT reported in [1997] 225 ITR 798/91 Taxman 26 (SC). In the case of Brooke Bond India Ltd. (supra), it was held that expenditure, in connection with the additional issue of shares, paid to the…

Mahanagar Gas Limited, Mumbai vs. Assistant Director of Income Tax, CPC

ITA 1694/MUM/2024[2021-22]Status: DisposedITAT Mumbai17 Dec 2024AY 2021-22

Bench: Justice (Retd.) Shri C.V. Bhadang & Shri B.R. Baskaran

For Appellant: Shri P.P. JayramanFor Respondent: Shri R.R. Makwana, Sr.DR
Section 143(1)Section 143(3)

…it proves otherwise. The question was whether the assessee was justified in seeking for bifurcation of the expenses incurred into capital and revenue. The Division Bench referred to the decision in the case of Brooke Bond India Ltd. vs. CIT reported in [1997] 225 ITR 798/91 Taxman 26 (SC). In the case of Brooke Bond India Ltd. (supra), it was held that expenditure, in connection with the additional issue of shares, paid to the…