Assessee incurred certain expenditure in connection with increase in authorized capital prior to commencement of production. The same was capitalized in the books and depreciation thereon was claimed by Assessee. The AO disallowed such expenditure on the ground that the Assessee was required to charge such expenditure as revenue expenditure. In appeal the CIT(A) partly allowed the Assessee’s appeal by holding that the AO cannot compel the Assessee to record such expenditure as revenue expenditure and thereby make disallowance, when the Assessee had capitalised expenditure in its books of accounts. Further, the CIT(A) was of the view that since expenditure on increase in authorized capital cannot be allowed as revenue expenditure, the Assessee cannot claim such expenditure by capitalising the same and claiming depreciation thereon. The Hon’ble Tribunal upheld the order of CIT (A).(AY. 2014-15)