| Question And Answer | |
|---|---|
| Subject: | Whether professional fee paid to obtain Private Equity is a revenue expenditure?. |
| Category: | Income-Tax |
| Querist: | Cheeran varghese |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | capital or revenue, Professional fees, revenue expenditure |
| Date: | May 18, 2021 |
Whether professional fee paid to obtain Private Equity is a revenue expenditure?.
The Hon’ble Supreme Court in the case of DCIT v. Raghuvir Synthetics Ltd. [2017] 394 ITR 1 (SC) held that Expenditure incurred on public issue of shares was in nature of capital expenditure.
Although, in the given case, the assessee has paid fee for private equity, in substance it is a transaction to raise funds (Capital) by issuance of shares. Therefore, the same may be treated as capital expenditure.
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