JUDGMENT

In this appeal, by certificate granted by the High Court under Section 261 of the Income Tax Act, 1961 (hereinafter referred to as the Act ), the following question referred to the Calcutta High Court by the Income Tax Tribunal (hereinafter referred to as the Tribunal ) was answered in favour of the Revenue and against the assessee :

"Whether on the facts and in the circumstances of the case, the Tribunal was right in sustaining the disallowance of Rs. 13,9..,305/- being expenses incurred in connection with the issue of fresh lot of shares in 1967?"

2. The question relates to the assessment year 1969-70 and the relevant account year ended on June 30, 1968. The assessee is a public limited company. It issued ordinary shares of Rs. 16,75,000/- of Rs. 10/- each at a premium with a view to increase its share capital and, in that connection, it incurred an expenditure of Rs. 13,99,305/- which amount was claimed by it as deductible expenses. The said deduction was disallowed by the Income Tax Officer on the view that the expenditure incurred by the assessee was on the capital account. The said view of the Income Tax officer was affirmed by the Appellate Assistant Commissioner and