2014 (12) TMI 1232

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....ibunal on these Appeals on 20th January, 2012 raises two substantial questions of law. 3) Ordinarily, we would have accepted this contention in relation to question No. 1, but, similar Appeals, admitted prior to the instant Appeal and in relation to the issue of addition in respect of the benefit resulting to the Assessee company from prepayment of Sales Tax liability were heard by a Division Bench of this Court, to which, one of us, (S. C. Dharmadhikari, J.) was a party. They came to be decided by this Court on 5th December, 2014, the identical question and dealt with by this Judgment, therefore, answers it in favour of the Assessee and against the Revenue. Following the Judgment of the Division Bench pertaining to identical question, we ....

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.... and 29 of the impugned order. The Assessee explained as to how the expenditure was neither incurred for initiation of a business nor for extension of a business nor for a substantial replacement of equipment. It has not resulted in any advantage or enduring benefit to the business. It merely reduced the revenue expenditure for the financial years 2002-03 to 2004-05. That was the time at which the debentures were redeemable and if the same were redeemed at that stage or on the date of redemption, the Assessee may have increased the taxable income for these financial years. Hence, the prepayment premium cannot be said to be a discharge of liability of a capital nature. The debenture was redeemed prematurely so as to save the cost of intere....