TaxTMI 
TaxTMI 
2017 (1) TMI 1211
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....ed the following substantial questions of law: D.B. Income Tax Appeal No. 572 / 2008 (admitted on 5.12.2008) "(i) Whether in the facts and circumstances of the case, the ITAT and CIT(A) were justified in law and have act perversely in holding the expenditure towards interest and financial/back charges as revenue expenditures when the said expenditure were pertaining to interest and bank charges which were pre operative in nature and were paid to the financial institution against loan obtained for installing the unit and were enduring the nature? (ii) Whether in the facts and circumstance of the case, the ITAT(A) were justified in law and have not acted perversely in allowing the expenditure incurred in earlier years tre....
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....n 35D of the Act had no application in respect of the aforesaid expenditure as the same was otherwise allowable revenue deduction. The CIT (A) also observed that the said expenditure was incurred on issue of debentures and the fact that the same were convertible into shares after a period of time would not make any difference to deductibility thereof. Finally, the CIT (A) has disallowed Rs. 1,02,747/- comprising of the expenses below Rs. 10,000/-. However, he has allowed the claim of Rs. 3,91,79,683/. 2.1. While admitting the appeals, this Court framed the following substantial questions of law vide order dated 25th April, 2007:- (I) Whether in the facts and circumstances of the case the ITAT and CIT (A) were justified in ....
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....s Ltd. [MANU/DE/5061/2013] 6) India cements Ltd. Vs. CIT AIR 1996 SC 1053 7) Madras Industrial Investment Corporation Ltd. Vs. Commissioner of Income Tax Tamil Nadu 1, Madras (1997) 4 SCC 666 8) Commissioner of Income Tax Vs. East India Hotels Ltd. [2001] 252 ITR 860 (Cal.) 9) Brooke Bond India Limited Vs. CIT (1997) 225 ITR798 (SC) 10) Commissioner of Income Tax Vs. Thirani Chemicals Ltd. [2007] 290 ITR 196 (Delhi) 11) Commissioner of Income Tax Vs. Hindustan Machine Tools Ltd. [1986] 175 ITR 212 (Kar) 12) Addi. Commissioner of Income Tax, Bombay City I Vs. Aniline Dyestuffs and Pharmaceuticals Pvt. Ltd. [1982] 138 ITR 844 (Bom.) 13) Commissioner of Income Tax Vs. Modi....
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....ing upon the judgment of Calcutta High Court in CIT v. East India Hotels Ltd. [2001]252ITR860(Cal), that the expenditure incurred, even in raising loan by convertible debenture would also be admissible as revenue expenditure. The Calcutta High Court had adopted the reasoning, that conversion of debentures results into repayment of loadn and issuance of shares. This is one aspect of the matter. In our view, the other more important aspect of the matter is, that the Hon'ble Supreme Court in Inida Cements case (supra) has clearly excluded this aspect from consideration, by holding, that it is irrelevant to consider the object, with which the loan was obtained. Admittedly the debentures when issued is a loan, and therefore, whether it is co....