|
The Tax Publishers2019 TaxPub(DT) 3730 (Guj-HC) : (2019) 264 TAXMAN 0182 INCOME TAX ACT, 1961
Section 37(1)
Expenditure incurred did not include price paid to shareholders for buying back the shares, but it only related to expenditure incurred for carrying out buyback scheme. Expenditure incurred for proceeding of implementation of buyback of shares did not in any manner enhance capital structure of assessee but there was outflow of capital and no deduction was claimed for outflow of capital, therefore, expenditure was revenue expenditure.
|
Capital or revenue expenditure - Legal and professional expenses incurred in relation to buy back of shares from its shareholders - -
Assessee-company claimed deduction of legal and professional expenses incurred in relation to buy back of shares from its shareholders. AO disallowed deduction on the ground that expenditure was incurred for reduction of share capital and capital reduction was not day-to-day affair of company nor it was related to business and, therefore, it partook the character of capital expenditure.Held: Expenditure incurred did not include price paid to shareholders for buying back the shares, but it only related to expenditure incurred for carrying out buyback scheme. Expenditure incurred for proceeding of implementation of buyback of shares did not in any manner enhance capital structure of assessee but there was outflow of capital and no deduction was claimed for outflow of capital, therefore, expenditure was revenue expenditure.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2004-2005
INCOME TAX ACT, 1961
Section 37(1)
SUBSCRIBE FOR FULL CONTENT |