COURT: |
|
CORAM: |
|
SECTION(S): |
|
GENRE: |
|
CATCH WORDS: |
|
COUNSEL: |
|
DATE: |
(Date of pronouncement) |
DATE: |
August 13, 2009 (Date of publication) |
AY: |
|
FILE: |
|
CITATION: |
|
|
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:
- Ventura Textiles Ltd vs. CIT (Bombay High Court) Concealment of particulars of income was not the charge against the appellant, the charge being furnishing inaccurate particulars of income. As discussed above, it is trite that penalty cannot be imposed for alleged breach of one limb of Section 271(1)(c) of the Act while penalty proceedings were initiated for breach…
- Amazonite Steel Pvt. Ltd vs. UOI (Calcutta High Court) The failure to do the above is nothing short of being an act of highhandedness. Such actions of the authorities is an obloquy and reprehensible. No explanation has been provided for the same either in the affidavits filed in the earlier writ petitions or by counsel appearing on behalf of…
- Paradigm Geophysical Pty Ltd vs. CIT (Delhi High Court) If the nature of services rendered have a proximate nexus with the extraction of production of mineral oils, it would be outside the ambit of the definition of FTS. In the instant case, since the nature of services rendered by the Petitioner gets excluded from the definition of “FTS”, in…
- M/s. J. S. & M. F. Builders vs. A. K. Chauhan (Bombay High Court) According to the Assessing Officer, assessee had erred in offering to tax ‘capital gains’ in the year when the individual flats were sold whereas such ‘capital gains’ could be assessed to tax only when the land is trasferred to the co-operative society formed by the flat purchasers. If the assessee…
- PCIT vs. ITAT (Bombay High Court) The use of the expression “may” in the aforesaid provision is clearly indicative of the legislative intent that the limitation period of six months from the end of the month in which the order was passed is not to be construed in such a manner that there can not be…
- PCIT vs. JSW Steel Ltd (Bombay High Court) In view of the second proviso to Section 153A(1) of the said Act, once assessment gets abated, it is open for the assessee to lodge a new claim in a proceeding under Section 153A(1) which was not claimed in his regular return of income, because assessment was never made/finalised in…
Recent Comments