ORDER

1. The question referred for decision reads as under :

"Whether in the facts and circumstances of the case, the Tribunal a was right in law in holding that the amount of Rs. 1,50,000 paid to Registrar of Companies, as filing fee for enhancement of capital was not revenue expenditure."

2. Since there was a conflict of opinion on this point amongst the various High Courts it was thought expedient by the Income Tax Appellate Tribunal Chandigarh Bench, to directly refer the question for decision by this Court under Section 257 of the Income Tax Act. The factual background in which the question arises for determination is that the applicant M/s. Punjab State Industrial Development Corporation Ltd. filed the return of its total income declaring an income of Rs. 13,83,049 on 30-6-1979. In the Profit and Loss Account an amount of Rs. 1,50,000 was claimed as revenue expenditure, the same having been paid to the Registrar of Companies as filing fee for enhancement of capital of the company. The Inspecting Assistant Commissioner of Income Tax (Assessment), Chandigarh, allowed the expenditure but the Commissioner of Income Tax, Patiala in exercise of power conferred on him under Section 263 of the IT Act revised the order suo motu as in his view the expenditure of Rs. 1,50,000 was wrongly allowed as revenue expenditure. He, therefore, enhanced the income computed by the lower authority by the amount of Rs. 1,50,000 and directed that the assessment be revised accordingly. Feeling aggrieved by the said order, the assessee preferred an appeal before the Income Tax Appellate Tribunal. The Tribunal upheld the order of the Commissioner placing reliance on the judgment in Groz-Beckert Saboo Ltd. v. CIT ((1986) 160 ITR 743 (P&H) of the Punjab and Haryana High Court. It was thereafter that a reference was sought under Section 256(1) of the IT Act, but as stated above, in view of the conflict of opinion amongst the High Courts in the country the question has been directly referred to this Court for determination.

3. The issue has been answered in favour of the assessee and against the Revenue by the High Courts of Madras, Karnataka, Andhra Pradesh and Kerala in the following decisions : CIT v. Kisenchand Chellaram (India) (P) Ltd. ((1981) 130 ITR 385 (Mad); Warner Hindustan Ltd. v. CTI; Hindustan Machine Tools Ltd. (No. 3) v. CIT ((1989) 175 ITR 220 : 1988 Tax LR 1150 (Kant) and Federal Bank Ltd. v. CIT ((1989) 180 ITR 241 (Ker). The High Courts of Allahabad, Himachal Pradesh, Delhi, Calcutta, Bombay, Punjab, Gujarat, Andhra Pradesh and Rajasthan have held in favour of the Revenue in the following cases : CIT v. Modi Spg. & Wvg. Mills Co. Ltd. ((1973) 89 ITR 304 (All); Mohan Meakin Breweries Ltd. v. CIT (No. 2) ((1979) 117 ITR 505 (HP); Bharat Carbon and Ribbon Mfg. Co. Ltd. v. CIT ((1981) 127 ITR 239 (Del); Brooke Bond India Ltd. v. CIT ((1983) 140 ITR 272 : 1982 Tax LR 858 (Cal); Bombay Burmah Trading Corpn. Ltd. v. CIT ((1984) 145 ITR 793 (Bom); Groz-Beckert Saboo Ltd. v. CIT ((1986) 160 ITR 743 (P&H)); Ahmedabad Mfg. & Calico (P) Ltd. v. CIT ((1986) 162 ITR 800 (Guj)); CIT v. Aditya Mills ((1990) 181 ITR 195 (Raj); CIT v. Multi Metals Ltd. ((1991) 188 ITR 151 (Raj)) and Vazir Sultan Tobacco Co. Ltd. v. CIT ((1988) 174 ITR 689 (AP)). We may also state that the Calcutta High Court has affirmed this earlier view in three subsequent decisions reported in Kesoram Industries & Cotton Mills Ltd. v. CIT ((1992) 196 ITR 845 (Cal); Wood Craft Products Ltd. v. CIT ((1993) 204 ITR 545 (Cal)) and CIT v. Tungabhadra Industries Ltd. ((1994) 207 ITR 553 (Cal)) and so also the Gujarat High Court has affirmed its earlier view in Alembic Glass Industries Ltd. v. CIT ((1993) 202 ITR 214 (Guj).

4. We may also indicate that this Court laid down the test for determining whether a particular expenditure is a revenue or capital expenditure in the case of Empire Jute Co. Ltd. v. CIT ((1980) 4 SCC 25 : 1980 SCC (Tax) 335 : (1980) 124 ITR 1). In that decision this C