Punjab State Industrial Development Corporation Ltd. v. CIT

225 ITR 792Supreme Court of India1997#620 most cited

What is Punjab State Industrial Development Corporation Ltd. v. CIT authority for?

Expenditure incurred for increasing a company's share capital, such as expenses related to issuing shares or an initial public offering (IPO), is capital expenditure. Such expenses are not allowable as a revenue deduction under Section 37, even if they incidentally benefit the business, because they result in an increase in capital.

158

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2006 to 2026.

Also referred to as

Punjab State Industrial Development Corporation Ltd. v. CIT · 225 ITR 792 · Section 37 · Section 37(1) · capital expenditure · revenue expenditure · issue of shares · IPO expenses · increase in share capital · allowability of deduction · business expenditure

Also reported as

93 Taxmann 5

Sections most often in play

Section 37(1)Section 143(3)Section 14ASection 35DSection 10BSection 43(5)Section 37Section 36(1)(iii)

Issues it is cited on

section 35denduring benefitsection 35revenue expendituredisallowance under section 14acapital expenditureput to usesection 45fair market valuemercantile system of accountingsection 37(1)section 37

Judgments citing Punjab State Industrial Development Corporation Ltd. v. CIT

ACIT, Chennai vs. Thiru Arooran Sugars Limited, Chennai

In the result, the appeals of the assessee are partly

ITA 1559/CHNY/2015[2011-12]Status: DisposedITAT Chennai18 Dec 2015AY 2011-12

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…he Assessing Officer has disallowed share issue expenses on the ground that share issue expenditure is capital expenditure and relied on the decisions of the Brooke Bond India Limited vs. CIT, 225 ITR 798 (SC) and Punjab State Industrial Corporation vs. CIT 225 ITR 792 (SC). The ld. Authorised Representative submitted that the share issue expenses are incurred in connection with the extension of its industrial undertaking in earlier years and the same to be allowed as Revenue expenditure or alternatively share issue expenditure to be treated as deferred revenue expenditure over a period of ten years u/s.35D…

Thiru Arooran Sugars Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee are partly

ITA 1348/CHNY/2015[2005-06]Status: DisposedITAT Chennai18 Dec 2015AY 2005-06

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…he Assessing Officer has disallowed share issue expenses on the ground that share issue expenditure is capital expenditure and relied on the decisions of the Brooke Bond India Limited vs. CIT, 225 ITR 798 (SC) and Punjab State Industrial Corporation vs. CIT 225 ITR 792 (SC). The ld. Authorised Representative submitted that the share issue expenses are incurred in connection with the extension of its industrial undertaking in earlier years and the same to be allowed as Revenue expenditure or alternatively share issue expenditure to be treated as deferred revenue expenditure over a period of ten years u/s.35D…

Thiru Arooran Sugars Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee are partly

ITA 1347/CHNY/2015[2000-01]Status: DisposedITAT Chennai18 Dec 2015AY 2000-01

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…he Assessing Officer has disallowed share issue expenses on the ground that share issue expenditure is capital expenditure and relied on the decisions of the Brooke Bond India Limited vs. CIT, 225 ITR 798 (SC) and Punjab State Industrial Corporation vs. CIT 225 ITR 792 (SC). The ld. Authorised Representative submitted that the share issue expenses are incurred in connection with the extension of its industrial undertaking in earlier years and the same to be allowed as Revenue expenditure or alternatively share issue expenditure to be treated as deferred revenue expenditure over a period of ten years u/s.35D…

Thiru Arooran Sugars Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee are partly

ITA 1346/CHNY/2015[1999-00]Status: DisposedITAT Chennai18 Dec 2015AY 1999-00

Bench: Shri Chandra Poojari & Shri G. Pavan Kumarआयकर अपील सं./I.T.A.Nos.1346, 1347, 1348 /Mds/2015 "नधा"रण वष" /Assessment Year : 1999-00, 2000-01, 2005-06

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. A.B. Koli, IRS, JCIT
Section 143(3)Section 147Section 35D

…he Assessing Officer has disallowed share issue expenses on the ground that share issue expenditure is capital expenditure and relied on the decisions of the Brooke Bond India Limited vs. CIT, 225 ITR 798 (SC) and Punjab State Industrial Corporation vs. CIT 225 ITR 792 (SC). The ld. Authorised Representative submitted that the share issue expenses are incurred in connection with the extension of its industrial undertaking in earlier years and the same to be allowed as Revenue expenditure or alternatively share issue expenditure to be treated as deferred revenue expenditure over a period of ten years u/s.35D…

Tata Consultancy Services Ltd, Mumbai vs. Addl CIT 2(3), Mumbai

The appeal is partly allowed

ITA 6820/MUM/2010[2005-06]Status: DisposedITAT Mumbai04 Nov 2015AY 2005-06

Bench: Sh. A.D. Jain & Sh. Rajendraassessment Year: 2005-06 Pan : Aaacr4849R M/S. Tata Consultancy Services Ltd. Vs. Addl. Commr. Of Income-Tax, 9Th Floor, Nirmal Building, Range 2(3), Nariman Point, Mumbai. Mumbai. (Appellant) (Respondent) Appellant By:Sh. Dinesh Vyas, Sr. Advocate Respondent By:Sh. N.K. Chand, Cit(Dr) Date Of Hearing : 30/07/2015 Date Of Pronouncement: 04/11/2015 Order Per A.D. Jain, Jm

For Appellant: Sh. Dinesh Vyas, Sr. AdvocateFor Respondent: Sh. N.K. Chand, CIT(DR)
Section 14ASection 30Section 40Section 70Section 90Section 91

…IN INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E” MUMBAI. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. RAJENDRA, ACCOUNTANT MEMBER Assessment Year: 2005-06 PAN : AAACR4849R M/s. Tata Consultancy Services Ltd. vs. Addl. Commr. of Income-tax, 9th Floor, Nirmal Building, Range 2(3), Nariman Point, Mumbai. Mumbai. (Appellant) (Respondent) Appellant by:Sh. Dinesh Vyas, Sr. Advocate Respondent by:Sh. N.K. Chand, CIT(DR) Date of hearing : 30/07/2015 Date of pronouncement: 04/11/2015 ORDER PER A.D. JAIN, JM This is assessee’s appeal for the assessment year 2005-06 against the order dated 03.08.2010, passed by the ld.…

I.T.O WD - 2(3), Kolkata. vs. M/S Last Peak Data Pvt Ltd., Kolkata

In the result the appeal of the revenue is dismissed

ITA 154/KOL/2013[2009-10]Status: DisposedITAT Kolkata30 Oct 2015AY 2009-10

Bench: Hon’Ble Shri N.V.Vasudevan, Jm & Shri Waseem Ahmed, Am ]

For Appellant: Shri Vasant SubramanyanFor Respondent: Shri Niraj Kumar, CIT(DR)
Section 10ASection 10BSection 115JSection 14

…IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH ‘B’ KOLKATA [Before Hon’ble Shri N.V.Vasudevan, JM & Shri Waseem Ahmed, AM ] ITA Nos.154&155/Kol/2013 Assessment Year : 2009-10 I.T.O., Ward-2(3) -versus- M/s.Last Peak Data Pvt. Ltd. Kolkata Kolkata (PAN:AABCL0380Q) (Appellant) (Respondent) For the Appellant : Shri Vasant Subramanyan, For the Respondent : Shri Niraj Kumar, CIT(DR) Date of Hearing : 05.10.2015. Date of Pronouncement : 30.10.2015. ORDER Per Shri N.V.Vasudevan, JM : ITA No. 154/Kol/2013 is an appeal by the Revenue against the order dated 8.10.2012 of CIT(A)-I, Kolkata, relating to AY 2009-10. 2. The…

Asst CIT 4(3), Mumbai vs. People Interactive (I) P.Ltd, Mumbai

ITA 6990/MUM/2013[2007-08]Status: DisposedITAT Mumbai21 Oct 2015AY 2007-08

Bench: Shri Shailendra Kumar Yadav & Shri Ramit Kochar

For Appellant: Sh. R. S.SamariaFor Respondent: Shri B S Bisht
Section 143(3)Section 147Section 148Section 151Section 37

…ly incurred any expenditure. The said expenditure relates to increase in share capital of the company and hence are capital expenditure. The AO relied upon the decision of Hon’ble Supreme Court in M/s Punjab State Industrial Corporation Limited v. CIT (1997) 225 ITR 792(SC) and Brooke Bond India Limited v. CIT(1997) 225 ITR 798 (SC) and held these expenses as capital expenditure not allowable as revenue expenses , more so these are merely share premium foregone and no such actual expenditure is incurred by the assessee company .Thus, AO disallowed the ESOP expenditure of Rs.81,93,150/- and added the same to…

Asst CIT 4(3), Mumbai vs. People Ineractive (I) P.Ltd, Mumbai

ITA 6986/MUM/2013[2008-09]Status: DisposedITAT Mumbai21 Oct 2015AY 2008-09

Bench: Shri Shailendra Kumar Yadav & Shri Ramit Kochar

For Appellant: Sh. R. S.SamariaFor Respondent: Shri B S Bisht
Section 143(3)Section 147Section 148Section 151Section 37

…ly incurred any expenditure. The said expenditure relates to increase in share capital of the company and hence are capital expenditure. The AO relied upon the decision of Hon’ble Supreme Court in M/s Punjab State Industrial Corporation Limited v. CIT (1997) 225 ITR 792(SC) and Brooke Bond India Limited v. CIT(1997) 225 ITR 798 (SC) and held these expenses as capital expenditure not allowable as revenue expenses , more so these are merely share premium foregone and no such actual expenditure is incurred by the assessee company .Thus, AO disallowed the ESOP expenditure of Rs.81,93,150/- and added the same to…

Inventurus Knowledge Services P.Ltd, Navi Mumbai vs. ITO 5(2)(1), Mumbai

In the result appeal of the assessee company is partly allowed

ITA 5922/MUM/2013[2009-10]Status: DisposedITAT Mumbai21 Oct 2015AY 2009-10

Bench: Shri Joginder Singh & Shri Ramit Kocharassessment Year: - 2009-10 Inventurus Knowledge Services V. Income Tax Officer Pvt. Ltd. 5(2)(1), C/O. Seren Properties Pvt. Ltd. 525, Aaykar Bhavan, (Sez), Unit No. 204, Build No. 5, M.K. Road, Mindspace Airoli Camp, Plot No. Mumbai - 400 020. 3, Gat No. 95, Kalwa Trans, Thane Creek, Midc Industrial Area, Thane Belapur Road, Airoli, Navi Mumbai – 400 708. Pan/Gir No. Aabck4601P

…ncrease in authorized capital of the company , the CIT(A) rejected the contention of the assessee in view of the decision of Hon’ble Supreme Court in the case of Brooke Bond India Ltd. v. CIT (1997) 225 ITR 798 (SC), Punjab State Ind. Corp. Ltd. v. CIT (1997) 225 ITR 792 (SC) and CIT v.Kodak India Ltd. (2002) 253 ITR 445 (SC) and held the same expenditure to be capital in nature as the expenditure for expansion of capital retains the character of capital expenditure since it is directly related to the expansion of the capital base of the appellant. 5. Aggrieved by the order of CIT(A), the assessee company is in…

People Interactive (I) P.Ltd, Mumbai vs. Asst CIT 4(3), Mumbai

ITA 4979/MUM/2013[2009-10]Status: DisposedITAT Mumbai21 Oct 2015AY 2009-10

Bench: Shri Shailendra Kumar Yadav & Shri Ramit Kochar

For Appellant: Sh. R. S.SamariaFor Respondent: Shri B S Bisht
Section 143(3)Section 147Section 148Section 151Section 37

…ly incurred any expenditure. The said expenditure relates to increase in share capital of the company and hence are capital expenditure. The AO relied upon the decision of Hon’ble Supreme Court in M/s Punjab State Industrial Corporation Limited v. CIT (1997) 225 ITR 792(SC) and Brooke Bond India Limited v. CIT(1997) 225 ITR 798 (SC) and held these expenses as capital expenditure not allowable as revenue expenses , more so these are merely share premium foregone and no such actual expenditure is incurred by the assessee company .Thus, AO disallowed the ESOP expenditure of Rs.81,93,150/- and added the same to…

CIT vs. Havells India Ltd

In the result the appeals filed by the revenue are disposed of with no

ITA/57/2012HC Delhi21 May 2012

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE R.V.EASWAR

Section 195Section 260ASection 40Section 9(1)(vii)

…ITA 55/2012 & 57/2012 Page 1 of 22 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 7th May, 2012 % Date of Decision: 21st May, 2012 + ITA No.55/2012 + ITA No.57/2012 COMMISSIONER OF INCOME TAX .....Appellant Through: Mr. Sanjeev Sabharwal, Sr. Standing Counsel. Versus HAVELLS INDIA LTD. ....Respondents Through: Mr. Ajay Vohra, Ms. Kavita Jha & Mr. Somnath Shukla, Advocates. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE R.V. EASWAR 1. Whether Reporters of local papers may be allowed to…

Commissioner of Income Tax vs. Havells India Ltd

In the result the appeals filed by the revenue are disposed of with no

ITA/55/2012HC Delhi21 May 2012
Section 195Section 201Section 260ASection 40Section 9(1)(vii)

…ITA 55/2012 & 57/2012 Page 1 of 22 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 7th May, 2012 % Date of Decision: 21st May, 2012 + ITA No.55/2012 + ITA No.57/2012 COMMISSIONER OF INCOME TAX .....Appellant Through: Mr. Sanjeev Sabharwal, Sr. Standing Counsel. Versus HAVELLS INDIA LTD. ....Respondents Through: Mr. Ajay Vohra, Ms. Kavita Jha & Mr. Somnath Shukla, Advocates. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE R.V. EASWAR 1. Whether Reporters of local papers may be allowed to…

CIT vs. Havells India Ltd

In the result the appeals filed by the revenue are disposed of with no

ITA - 55 / 2012HC Delhi21 Apr 2012
Section 195Section 201Section 260ASection 40Section 9(1)(vii)

…ITA 55/2012 & 57/2012 Page 1 of 22 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 7th May, 2012 % Date of Decision: 21st May, 2012 + ITA No.55/2012 + ITA No.57/2012 COMMISSIONER OF INCOME TAX .....Appellant Through: Mr. Sanjeev Sabharwal, Sr. Standing Counsel. Versus HAVELLS INDIA LTD. ....Respondents Through: Mr. Ajay Vohra, Ms. Kavita Jha & Mr. Somnath Shukla, Advocates. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE R.V. EASWAR 1. Whether Reporters of local papers may be allowed to…

Commissioner of Income Tax vs. Brahmaputra Consortium Ltd

ITA/1582/2010HC Delhi03 Aug 2011

Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA

Section 271

…OC is concerned, as per the Assessing Officer this fee was paid for increase of authorized share capital which could not be treated as revenue expenditure in view of the categorical judgment of the Apex Court in PSIDC Ltd. Vs. Commissioner of Income Tax, 225 ITR 792 and, therefore, the claim was palpably false. 6. The CIT (A) concurred with the aforesaid approach of the Assessing Officer holding that in view of Explanation-I to Section 271 (1) (c) of the Act disallowances of above claims deem to be the income in respect of which particulars had been concealed by the assessee within the meaning of S…

Commissioner of Income Tax vs. Brahmaputra Consortium Ltd

ITA - 1582 / 2010HC Delhi03 Aug 2011
Section 271

…OC is concerned, as per the Assessing Officer this fee was paid for increase of authorized share capital which could not be treated as revenue expenditure in view of the categorical judgment of the Apex Court in PSIDC Ltd. Vs. Commissioner of Income Tax, 225 ITR 792 and, therefore, the claim was palpably false. 6. The CIT (A) concurred with the aforesaid approach of the Assessing Officer holding that in view of Explanation-I to Section 271 (1) (c) of the Act disallowances of above claims deem to be the income in respect of which particulars had been concealed by the assessee within the meaning of S…

Commissioner of Income Tax vs. Samtel Colour Limited

In the result, the appeal is dismissed

ITA-1152/2008HC Delhi30 Jan 2009
For Appellant: Ms. Prem Lata Bansal, Mr.Mohan Prasad Gupta andFor Respondent: Mr Ajay Vohra & Ms Kavita Jha
Section 260A

…l, Ms Prem Lata Bansal has cited the judgment of the Framatone Connector OEN Ltd vs. DCIT; (2006) 157 Taxmann 116. The said judgment is based on the Supreme Court judgment in the case of Punjab State Industrial Development Corporation Ltd vs. CIT; (1997) 225 ITR 792. The judgment of the Supreme Court on which the Kerala High Court has relied heavily dealt with the issue with regard to fee paid to the Registrar of Companies for increase of authorised capital, that is, whether such an expense was in the nature of revenue or capital expenditure. The Supreme Court came to the conclusion that since the fee…

Commissioner of Income Tax vs. Samtel Color Limited

In the result, the appeal is dismissed

ITA/1152/2008HC Delhi30 Jan 2009
For Appellant: Ms. Prem Lata Bansal, Mr.Mohan Prasad Gupta andFor Respondent: Mr Ajay Vohra & Ms Kavita Jha
Section 260A

…l, Ms Prem Lata Bansal has cited the judgment of the Framatone Connector OEN Ltd vs. DCIT; (2006) 157 Taxmann 116. The said judgment is based on the Supreme Court judgment in the case of Punjab State Industrial Development Corporation Ltd vs. CIT; (1997) 225 ITR 792. The judgment of the Supreme Court on which the Kerala High Court has relied heavily dealt with the issue with regard to fee paid to the Registrar of Companies for increase of authorised capital, that is, whether such an expense was in the nature of revenue or capital expenditure. The Supreme Court came to the conclusion that since the fee…

Commnr. of Income Tax, Mumbai vs. M/S. General Insurance Corpn.of India

C.A. No.-004422-004422 - 2001Supreme Court25 Sept 2006
For Respondent: M/s General Insurance Corporation
Section 143Section 260Section 81

…ultant impact on the capital structure of the company and therefore, it should be regarded as the capital expenditure. Reliance has also been placed upon the judgments of this Court in Punjab State Industrial Development Corporation Ltd. Vs. CIT, (1997) 225 ITR 792 (SC) and Brooke Bond India Ltd. Vs. CIT, (1997) 225 ITR 798 (SC). He also relied upon in CIT vs. Motor Industries Co. Ltd., (1998) 229 ITR 137 of Karnataka High Court, in CIT vs. Ajit Mills Limited, (1994) 210 ITR 658, Gujrat Steel Tubes Ltd., vs. CIT, (1994) 210 ITR 358 of Gujarat High Court & Union Carbide India Ltd., vs. CIT, (1993) 203…