Urgent

Stamp Duty of Rs. 700000 paid on Increasing the Authorised Capital.  Whether it is Capital Expenditure or Revenue Expenditure??

Replies (5)

revenue expenditure and shall be charged to PL A/c

is there any case law???

there is one case law in singania book under sec. 37(1).

please check it.

The expenses incurred by way of payment of fees to ROC and related expenses to increase of additional share capital is capital expenditure for income tax purpose. Refer following case Law: Punjab State Industrial Development Corporation Vs. CIT 225 ITR 792(SC) and Brooke Bond India Ltd. Vs. CIT 225 ITR 798 (SC). Both the decisions discusses about the allowability of the expenditure incurred for enhancement of capital.

Fees paid to Increase authorised share capital is of Capital nature.Hence not allowed as deduction for income tax purpose u/s 37.( you can find the same in  g.sekhar material and in singhania also u/s 37 final books ) . its a capital expenditure.

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