TaxTMI 
TaxTMI 
2012 (4) TMI 128
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....s of law are raised: (A) Whether on the facts and in the circumstances of the case and in law, the ITAT is right in deleting disallowance of foreign expenses incurred on the relatives of the Directors; (B) Whether on the facts and in the circumstances of the case and in law, the ITAT is right in deleting disallowance of pre-operative expenses even though the said expenditure which pertains to establishment of textile and files division is capital in nature; (C) Whether on the facts and in the circumstances of the case and in law, the ITAT is right in reversing the order of CIT(A) and allowing the set off of short term capital loss against short term capital gain arising on sale of debentures and units; ....
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....favour of the assessee by the judgment delivered by this Court today in companion Income Tax Appeal No.189 of 2011 pertaining to Assessment Year to 1990-91. For the reasons already indicated by the Court while disposing of the companion appeal, this question will not raise any substantial question of law. 5. As regards Questions C and D, it is agreed between the counsel appearing on behalf of the Revenue and the counsel appearing on behalf of the assessee that the same are covered by the judgment of the Supreme Court in Commissioner of Income Tax Vs. Wallfort Share and Stock P. Ltd. 2010 326 ITR 1 (SC) in favour of the assessee and against the Revenue. Hence these questions would not give rise to any substantial question of law. &....
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....of the assessee. 7. In the decision of the Supreme Court in Madras Industrial Investment Corporation Ltd. Vs. Commission of Income Tax (1997) 225 ITR 802 the assessee had made a public issue of debentures. The debentures were issued at a discount of 2 per cent and were redeemable after twelve years. The total discount on the issue of Rs. 1.5 crores amounted to Rs. 3 lakhs. For Assessment Year 1968-69 the assessee wrote off Rs. 12500 out of a total discount of Rs. 3 lakhs, being the proportionate amount of the discount. The Assessing Officer disallowed the claim of the appellant on the ground that the discount on the debentures was not allowable as expenditure. The AAC however, upheld the claim for deduction of Rs. 12,500/-. The Tr....
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....a discount, it had incurred a liability to pay a larger amount than what it had borrowed, at a future date. The Court held that the liability to pay the discounted amount over and above the amount received for the debentures is a liability which has been incurred by the company for the purpose of its business in order to generate funds for its business activities. The amounts so obtained by issue of debentures were used by the assessee for the purpose of its business and was, therefore, held to constitute expenditure. 9. In the present case the assessee issued Non Convertible Debentures in the Financial Year ending on 31 March 1985, which were liable to be redeemed in Financial Year 1991-92 at a premium of Rs. 15 lakhs. The amount which ....