In Brief
The respondent, a public limited company, claimed Rs. 65,47,448 as revenue expenditure for advertisement and public issue expenses in its 1994-95 return, with an alternative claim under Section 35D. The Assessing Officer disallowed most of this amount under Section 143(1)(a), but the first appellate authority and the High Court held the issue was too debatable to be disallowed at that stage. The Supreme Court reversed this, finding that the Gujarat High Court had already settled that such preliminary capital-raising expenses constitute capital expenditure, not revenue. Therefore, for the respondent, the issue was not debatable, and the Revenue could proceed with the disallowance under Section 143(1)(a). The appeal was allowed.
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