Authorized Capital

Hi Ritesh...

   An increase in the authorised capital of the company enables it to issue shares and thereby raise long-term funds. Such a permanent facility of enhancing the authorised capital, obtained by paying fees to the Registrar, is a capital expenditure and cannot be claimed as revenue expenditure(Punjab State Industrial Development Corporation Ltd vs CIT _ 1997 93 Taxman 5 SC).

I don't think it is a capital expenditure per se & can be claimed as rates & taxes...

i totally agree with shekar and the reference of the case is also correct  its capital expenditure bcoz the increse in authorised capital is normally a cause to further raise of capital therefore it is capital expenditure hence not allowable.

Hey, I got d answer. Its clearly & unambigously mentioned in Sec 35D that any expenditure incurred for the pupose of extention of  Industrial Undertaking shall be granted in 1/5 as adeduction in that F.Y.. So following the nature of the company, if it's Industrial in nature then 1/5 of Total Expenditure is allowable otherwise not.

no man its surely capital expenditure

35D is for primary expenditure man

I totally agree with shaker it is a capital expenditure and it is not allowed in income tax act section 35 d is totally different and does not apply in your case

Dear Ritesh,

Sec 35D - refers to Amortisation of certain preliminary expenses

We cannot refer this section for Authorised Capital issue because sections refers to only Issued Capital. (Refer 35D(2)(c)(iv).

Even the explanation below the section provides meaning to capital employed as Issued share capital....

So, we cannot refer 35D for this issue.  Thanks

Since there is no specific clause in income tax act, we need to go by case laws as mentioned by friends above...

Regards,

gurusanthanam