In the appeal filed by the Revenue ,the issue before the court is whether the upfront fees\u00a0and\u00a0brokerage\u00a0fees\u00a0for\u00a0issuing\u00a0non-convertible\u00a0debentures\u00a0should be\u00a0allowed\u00a0fully\u00a0in\u00a0the\u00a0assessment\u00a0year\u00a02004-05\u00a0or\u00a0should\u00a0be\u00a0spread over\u00a0two\u00a0years\u00a0for\u00a0which\u00a0non-convertible\u00a0debentures\u00a0were\u00a0issued.\u00a0There is\u00a0no\u00a0dispute\u00a0between\u00a0the\u00a0parties\u00a0that\u00a0expenses\u00a0have\u00a0to\u00a0be\u00a0allowed\u00a0as\u00a0a deduction,\u00a0but\u00a0the\u00a0only\u00a0issue\u00a0is\u00a0whether\u00a0it\u00a0should\u00a0be\u00a0allowed\u00a0fully\u00a0in one\u00a0year\u00a0or\u00a0it\u00a0should\u00a0be\u00a0spread\u00a0over\u00a0a\u00a0period\u00a0of\u00a0two\u00a0years.\u00a0The\u00a0rate\u00a0of tax\u00a0for\u00a0the\u00a0assessment\u00a0years\u00a02004-05\u00a0and\u00a02005-06\u00a0is\u00a0same. Following the judgement in \u00a0\u00a0CIT\u00a0\u00a0v.\u00a0Nagri\u00a0Mills\u00a0Co.\u00a0Ltd.(1958) 33 ITR 681 ( Bom)( HC) has observed that if the tax rate is uniform in \u00a0two\u00a0years\u00a0then,\u00a0the\u00a0deduction\u00a0whether\u00a0claimed\u00a0by the\u00a0assessee\u00a0in\u00a0the\u00a0year\u00a0one\u00a0or\u00a0two\u00a0is\u00a0of\u00a0no\u00a0consequence\u00a0to\u00a0the\u00a0revenue. \u00a0Referred PCIT v. Rakesh Prakash Timblo (2019) 106 taxmann.com 255 \/415 ITR 344 ( Bom)( HC), CIT v. Excel Industries \u00a0Ltd \u00a0(2013) 358 ITR 295 (SC) .Court also held that \u00a0in Madras\u00a0Industrial\u00a0Investment\u00a0Corporation\u00a0Ltd.\u00a0v.\u00a0CIT\u00a0 (1997 ) 225 ITR 802 (SC) \u00a0\u00a0and \u00a0Taparia Tools Ltd\u00a0 v. JCIT (2015) 372 ITR 605( SC) \u00a0the \u00a0Hon\u2019ble Supreme Court has held that the revenue\u00a0expenditure\u00a0is\u00a0to\u00a0be\u00a0allowed\u00a0in\u00a0the\u00a0year\u00a0in\u00a0which\u00a0it\u00a0is\u00a0incurred but\u00a0it\u00a0could\u00a0be\u00a0spread\u00a0over\u00a0only\u00a0at\u00a0the\u00a0instance\u00a0of\u00a0an\u00a0assessee . Appeal of Revenue is dismissed . (AY.2004 -05) \u00a0\u00a0(ITA NO.661 of 2018 dt .8-1 -2025 )<\/p>\n","protected":false},"excerpt":{"rendered":"
S.37(1): Business expenditure \u2013 Upfront fees and brokerage fees \u2013 Non -convertible debentures \u2013 Year of allowability \u2013 If the tax rate is uniform in two years then, the deduction whether claimed by the assessee in the year one or two is of no consequence to the revenue- The revenue expenditure is to be allowed in the year in which it is incurred but it could be spread over only at the instance of an assessee – Order of Tribunal is affirmed \u2013 No substantial question of law .[ S. 145 , 260A ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-49703","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-cVF","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49703","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=49703"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49703\/revisions"}],"predecessor-version":[{"id":49704,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/49703\/revisions\/49704"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=49703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=49703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=49703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}