Question And Answer
Subject: Payment of stamp duty on merger
Querist: Sree lekha
Answered by:
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Date: June 10, 2023
Query asked by Sree lekha


What is the deductability of the stamp duty paid by the company at the time of merger? Will it be treated as capital expenditure?


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The same would be treated as capital expenditure.
The Gujarat High Court in the case of CIT v. Official Liquidator, Ahmedabad Mfg. & Calico Printing Co. Ltd. [2000] 244 ITR 156( Guj))( HC ) wherein it has been held that expenditure incurred in connection with an amalgamation scheme is to be treated as capital expenditure.
The Supreme Court in the case of Punjab State Industrial Development Corpn. Ltd. v. CIT [1997] 225 ITR 792 ( SC) that any expenditure incurred for widening the capital base has to be treated as capital expenditure.

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