2013 (10) TMI 285

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....ed 28.10.2005 leading to the present appeal, the Assessing Officer ['the AO'] processed the return filed by the respondent-assessee, who derives income from manufacture and sale of process control instruments, UPS and telecommunication instruments. 3. For the purpose of present appeal, suffice it to notice that the AO found a sum of Rs.1,05,87,365/- having been provided for contractual obligation; and with reference to the fact that provision under this head was subject-matter of consideration in the preceding years too and the matter was subjudice before this Court in the appeal filed by the department, the AO proceeded to disallow such a provision and added the amount in question to the income of the assessee. The Commissioner of Income ....

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....penditure of Rs.12,74,949/- incurred on account of issue of bonds was of revenue nature and not capital expenditure?" 5. So far the suggested question No.1 is concerned, in the totality of circumstances and with reference to the fact that the same issue in relation to the previous year is pending in this court, it appears just and proper to formulate the same for the purpose of consideration of this appeal too. However, so far the suggested question No.2 is concerned, we are clearly of the view that the same does not arise as a substantial question of law for consideration in this appeal. 6. This Court in the case of Secure Meters Ltd (supra) with reference to the decision of the Hon'ble Supreme Court in the case of India Cements Ltd. v. ....

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....that be so, it is difficult to see how the Revenue can still argue that since the case in hand refers to issue of debentures for expansion of an existing business, the expenditure incurred on the same must be amortised. Since the circular instructions are binding, the Revenue would not be entitled to urge any such contention. To set the controversy at rest, the circular specifically states that expenditure incurred on the issue of debentures will be a permissible deduction notwithstanding the introduction of Section 35D. There is, after those instructions, no room for any further debate on the issue. The Tribunal was, in that view, perfectly justified in holding that the expenditure was a permissible deduction and accordingly deleting the a....