In order to appreciate the issue involved in these appeals, it is necessary to state few relevant facts infra.
It is against these orders, the Company assessee felt aggrieved and filed two separate appeals under Section 260A of the Act before the High Court.
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The Tribunal allowed the appeals and reversed the view taken by the Commissioner of Income Tax Appeals .
By impugned judgment orders, the High Court dismissed the appeals and affirmed the orders of the Tribunal.
The A.O. did number agree with the explanation given by the appellant.
Having heard the learned companynsel for the parties and on perusal of the record of the case, we find numbermerit in the appeals.
In other words, the Commissioner allowed the deduction claimed by the appellant of the entire amount under Section 35D of the Act.
The Revenue, felt aggrieved, filed appeals before the Tribunal.
The A.O. accordingly calculated the allowable deduction under Section 35D of the Act at Rs.1,95,049/ and disallowed the remaining one by adding back to the total income of the appellant for taxation purpose.
The Commissioner also was of the view that the share premium account, which is shown as reserve in the balance sheet of the Company, was in the nature of the capital base of the Company and hence deduction under Section 35D of the Act was admissible with reference to the said amount also.
The appellant assessee companytended therein that it had issued shares on a premium which, according to them, was a part of the capital employed in their business.
The appellant is a Limited Company engaged in the business of manufacture and sale of various kinds of paints.
799 of 2004 and 797 of 2004 whereby the High Court dismissed the appeals filed by the appellant herein arising out of the order dated 26.04.2004 and 25.08.2004 passed by the Income Tax Appellate Tribunal, New Delhi hereinafter referred to as the Tribunal in I.T.A. No.2307/Del/2000 Assessment Year 1996 97 and I.T.A. No.1434/Del/2001 Assessment Year 1997 98 respectively.
The Commissioner was of the view that since the capital employed companysists of subscribed capital, debentures and long term borrowings, any premium companylected by the appellant Company on the shares issued by it should also be included in the said expression and be treated as the capital companytributed by the shareholders.
The appellant assessee replied to the numberice.
Felt aggrieved, the Assessee Company has filed these appeals before this Court.
He was of the view that the expression capital employed in the business of the companypany did number include the premium amount received by the appellant on share capital.
For the Assessment Year 1996 97, the appellant assessee filed their income tax return and declared the total income at Rs.3,64,64,527/ .
The appellant, felt aggrieved, filed appeals before the Commissioner of Income Tax appeals .
Abhay Manohar Sapre, J. These appeals are filed against the final judgment and orders dated 15.05.2006 passed by the High Court of Delhi at New Delhi in Appeal Nos.
Accordingly, the Commissioner allowed the appeals, set aside the order of A.O and disallowance of Rs.5,08,257/ made by the A.O. and, therefore, deleted the said sum.
