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Section 35D of Income Tax Act

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Hi Friends,

please clarify me whether the term "capital employed" used in section 35D of IT Act means issued capital or paid up capital.......... in act it says issued capital......... but why is it so?........ since in real sense what we have employed in the company is only paid up capital

it would be of great help if one could specify any case law in this regard

Gaurav Gupta

Replies (3)
when a specific definition is given in the section the same is to be followed .
That I understand sir but then is securities premium a part of issued capital???....refer schedule VI where securities premium is shown under reserve & surplus head.... it has been held in the case of CIT vs Sirhind steel Ltd. (2005) 97 ITD 502 (Ahd) that " issued share capital includes share/securities premium account also"....the case is specially refered in taxmann books.... strictly following the words of the act it should not have been included

 

 

IT LOOKS LIKE DEAR GAURAV V GUPTA HAS NOT READ JUDGEMENT CAREFULLY WHICH QUOTED AS FOLLOWS

Section 35D of Income-tax Act – Premium collected by assessee on issue of its share capital has to be excluded for purpose of determining amount of capital employed in business of company while computing deduction under section 35D(3)

 

  • The disallowance of claim under section 35D made by the AO by excluding the share premium from the capital employed in the business of the company is justified

for more information follow the link

https://www.taxmann.com/opencaselaws.aspx?stype=2&searchid=3517&tp=digest

 

[2010] 6 taxmann.com 101 (New Delhi - ITAT)

ITAT DELHI BENCH ‘A’: NEW DELHI

DCIT

v.

Axis & T. Ltd.

I.T.A. Nos. 211 & 823/Del/2010

July 29, 2010

 

 

 


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