Any expenditure in relatiion to the Share capital of the company shall be capitalized only if it results into an increase of the Capital Base of the Company. For instance if the capital base of the company is say 5cr shares & any expenditure is incurred which increases the capital base say to 5.5cr then this expenditure is required to be capitalized. please refer the case CITv/s GIC ltd in which the SC has laid down the said judgement.
In the present case the company has incurred the expenditure in relation to the valuation of the shares whihc might increase the share capital of the co but the capital base would remain unchanged. Hence the expenditure should be allowed as an expense & TDS needs to be made at the appropriate rate u/w 194J.
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