1998 (12) TMI 611

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....988-89, the revenue has filed this application under Section 256(2) confining its prayer for requiring the Tribunal to refer only question No.1 for the opinion of this Court. "1. Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by the Commissioner of Income Tax (Appeals) deleting the addition of Rs. 1,21,429/- made on account of premium payable on redemption of debentures, when the Assessing Officer was of the opinion that the entire amount of premium accrued in the year in which the debentures were redeemed and did not form part of the expenditure for the current year?" 2. Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by the Commissio....

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....es and becomes expenditure on the business only in the year in which debentures are repaid or redeemed or the liability accrues earlier thereto. 4. The question arose for consideration before Their Lordships in Supreme Court in Madras Industrial Investment Corporation Limited v. Commissioner of Income-tax 225 ITR 802. It was a case where the appellant company had issued debentures in December 1966, at a discount. The total discount on the issue of Rs. 1.5 crores amounted to Rs. 3.00 lakhs. For the assessment year 1968-69, the company wrote off Rs. 12,500 out of the total discount of Rs. 3 lakhs being the proportionate amount of discount for the period of six months ending with June 30, 1967, taking into account the period of 12 years whi....