Click Here For Best Books On Taxation & Law. Upto 60% Off On Select Titles. Free Shipping & Pay On Delivery!
 

Click Here To Subscribe To Our Free Newsletter

Home › All Judgements › CIT vs. Secure Meters (Rajashthan High Court)

CIT vs. Secure Meters (Rajashthan High Court)

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: August 13, 2009 (Date of publication)
AY:
FILE:
CITATION:

Click here to download the judgement (secure_meter_convertible_debenture_expenditure.pdf)

Expenditure on convertible debentures is deductible

The assessee incurred expenditure on issue of convertible debentures. The department claimed that convertible debentures were akin to shares and that in line with the judgement of the Supreme Court in Brooke Bond 225 ITR 798 the expenditure was capital in nature. HELD rejecting the claim that:

A debenture, when issued, is a loan. The fact that it is convertible does not militate against it being a loan. In accordance with India Cement 60 ITR 52 (SC), expenditure on a loan is always revenue in nature even if the loan is taken for capital purposes. Consequently, the expenditure on convertible debentures is admissible as revenue expenditure.

Note: The Department’s SLP against this judgement has been dismissed (included in the above file).
See Also: Ashima Syntex 100 ITD 247 (Ahd) (SB) where a contrary view was taken and Ganesh Benzoplast 111 TTJ (Mum) 385 where a favourable view was taken.

Related Posts:

  • CIT vs. L&T Finance Ltd (Bombay High Court) Mere using the words that there is concealment of income and / or furnishing inaccurate particulars of income would not in the absence of same being particularized, lead to imposition of penalty. It is only when the specified officer of the Revenue is satisfied that there has been concealment of…
  • Pr CIT vs. Prem Pal Gandhi (P&H High Court) The assessee purchased shares of a company during the assessment year 2006-2007 at Rs 11/- and sold the same in the assessment year 2008-2009 at Rs 400/- per share. The Assessing Officer added the appreciation to the assessees’ income on the suspicion that these were fictitious transactions and that the…
  • J. J. Development Pvt. Ltd vs. CIT (Calcutta High Court) The appellant-assessee has referred to a judgment of this Court reported at 114 ITR 689 for the proposition that upon the identity of the person who has put in the money being established by the assessee, the onus is on the Revenue to discredit the explanation offered in terms of…
  • S. Rajalakshmi vs. ITO (Bombay High Court) The reopening of assessment u/s 147 on the basis of information in the form of observations of ITAT is on sound footing and which constitutes a tangible material for the purpose of reopening as the assessee did not file her return of income as required u/s 139(1) of the Act…
  • Arun Arya Vs. ITO (J&K High Court) When a calculating tax dodger finds it a profitable proposition to carry on evading taxes over the years, if the only risk to which he is exposed is a monetary penalty in the year in which he happens to be caught. The public in general also tends to lose faith…
  • Pr. CIT vs. Veedhata Tower Pvt. Ltd (Bombay High Court) The proviso to Section 68 of the Act has been introduced by the Finance Act, 2012 w.e.f. 1st April, 2013 and therefore it would be effective only from Assessment Year 2013-14 onwards and not for the earlier assessment years. Where the Revenue urges that the money has been received from…

Related Judgements

  1. CIT vs. Vardhaman Polytex (P & H High Court) (Full Bench) 

    (i) In considering whether the interest paid by an assessee on loans raised for acquisition of new asset, before the same was first put to use, is to be added towards the cost of the asset or the same is … CIT vs. Vardhaman Polytex (P & H…
  2. SET Satellite (Singapore) vs. DDIT (Bombay High Court) 

    The effect of Article 7 (1) of the DTAA and Circular No. 23 dated 23.7.1969 is that the income of a non-resident which is neither directly nor indirectly attributable to the PE cannot be brought to tax.
    Read more ›
  3. Shivsagar Veg vs. ACIT (Bombay High Court) 

    It is incumbent upon the Tribunal, being the final authority of facts, to appreciate the evidence, consider the reasons of the authorities below and assign its own reasons as to why it disagrees with the reasons and findings of the lower authorities. The Tribunal cannot brush aside the reasons…
  4. Coca Cola India Inc vs. ACIT (P & H High Court) 

    The transfer pricing provisions are applicable to a well defined class which meets the test of intelligible differentia. It also meets the test of rational relationship to the object i.e. to determine the real income. There is no ambiguity or absurd consequence of application of Chapter X to persons…
  5. Vodafone Essar South vs. UOI (Bombay High Court) 

    We are clearly of the opinion that in the present case, the conduct of the D.R.I. officers is not only high handed but it is in gross abuse of the powers vested in them under the Customs Act. It is apparent that the D.R.I. officers in utter disregard to…