Assessee-company entered into an debenture subscription and share purchase agreement with HDFC wherein HDFC agreed to subscribe optionally convertible debentures of assessee.  Assessee claimed deduction on account of premium paid on redemption of these debentures as revenue expenditure. Assessing Officer held that  premium paid on redemption would be arising out of reserves and surplus and, thus, same would constitute capital expenditure and could not be allowed as deduction. High Court held that since issuance of debentures and deduction of TDS was not in dispute, premium paid by assessee to allottee on redemption of debentures was to be allowed as revenue expenditure.  SLP of revenue dismissed. (AY. 2011-12)