MSME Certified Income Tax Live Batch to commence from 25th January 2022. Limited Seats. Register Now!!


Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

ROC fees for increase in nominal share capital

This query is : Resolved 


Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
18 September 2010 Friends,

A co has increased nominal share capital & paid ROC fees.
Is there a case law [specially SC] to allow this expense as a deduction in Income-tax?

18 September 2010 Delhi high court in (2001) 250 ITR 338 said 35D can be claimed if such expenditure is incurred in connection with the expansion of the industrial undertaking or in connection with setting up of the new industrial undertaking.

18 September 2010 Agreed it will be deffered and allowed in 5 instalment.

18 September 2010 But Kerala High court in The Federal Bank Ltd's case said that the referred expenditure is revenue in nature applying commerecial expedency test. I don't remember the citation right now and hence request members of this club to clarify and comment on it according to their convenience.


Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
18 September 2010 Thanks Mr. Warrier,
But the said judgement of Delhi HC in CIT vs Hindustan Insectides [250 ITR 338] of 2001 says that ROC fees paid for increasing nominal capital does not qualify for deduction @ 20% pa under sec 35D(2)(c)(iii). This is because enhancing nominal capital is not the same as registering a company.
So if ROC fees are paid for increasing nominal capital that is not a public issue [Sec 35D (2)(c)(iv)] for expansion of business [Sec 35D(1)(ii)], amortisation would not be available.

19 September 2010 Have a look at Federal Bank Ltd Vs. CIT (1989)180 ITR 241 (Ker).

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries