Commissioner Of Income Tax, Mumbai vs M/S General Insurance Corporation

The Supreme Court addressed whether expenses related to the issuance of bonus shares qualify as capital or revenue expenditure under the Income Tax Act. The Court held that such expenses are to be treated as revenue expenditure, aligning with the precedent set in Bombay Burmah Trading Corporation's case, as the issuance of bonus shares does not expand the capital base but reallocates existing funds. The Court affirmed the decisions of the lower authorities, thereby upholding the Tribunal's ruling that allowed the expenditure as deductible.