Payments to ROC for Increasing Authorised Capital is Revenue Expenditure & Allowable u/s 37(1) in Certain Facts & Circumstances !

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The general answer to the question in title of this post i.e whether the payments made to ROC to increase the authorized share capital of a private limited company is as revenue expenditure ? will be in Negative . The primary reason for such quick answer is three judgments from Apex Court in Brooke Bond India Ltd. v. CIT [1997] 225 ITR 798/91 Taxman 26 (SC), in Punjab State Industrial Development Corpn. Ltd. v. CIT [1997] 225 ITR 792/93 Taxman 5 (SC) and followed in  CIT v. Kodak India Ltd. [2002] 253 ITR 445/120 Taxman 498 (SC).The verdict is all these cases are that the expenditure for enhancing authorized capital is a capital expenditure and not revenue expenditure. Therefore , not allowable. This post tries to bring out before readers that  the aforesaid judgments of S.C may not be applicable in many facts and circumstances , therefore , those peculiar facts, the fee to ROC for increase in authorized capital maybe allowable.

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