Held that the assessee had utilised 92 per cent. of receipts on account of public issue on working capital. Hence 92 per cent. of Rs. 38 crores of share issue expenditure would be revenue expenditure and balance 8 per cent. which was spent on capital expenditure would not be treated as revenue expenditure. The proceeds utilized for capital expenditure were allowable under section 35D of the Act. (AY. 2013-14, 2014-15)
ACIT v. PC Jewellers Ltd. (2022) 93 ITR 244 (Delhi)(Trib.)
S. 35D : Amortisation of preliminary expenses-Share capital to Public through initial public offer-Utilising 92 Per Cent. of receipts on working capital-92 Per Cent. of share issue expenditure allowable as revenue expenditure-Balance 8 Per Cent. to be treated as capital expenditure. [S. 37(1)]