2006 (9) TMI 139

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....ted company, filed its return declaring loss to a tune of Rs. 9,50,09,667/-. The Assessing Officer, after completing the assessment under section 143(3) of the Income-tax Act, 1961, treated the upfront fee of Rs. 4.4lakhs paid to the bank for availing of loan as capital expenditure and also treated the sales tax and excise duty collection as trading receipts and accordingly added the same. The Assessing Officer also disallowed the deduction claimed by the assessee under section 43B in respect of the interest paid to the financial institutions. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals), who allowed the appeal holding the issues in favour of the assessee. On a....

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.... of loan for purchase of machineries. But, the Assessing Officer, holding that since the loan borrowed from the bank was used for purchase of plant and machinery, the up front fee spent by the assessee for availing of the said loan should be treated as capital expenditure and not as revenue expenditure, as it was meant for capitalising the plant and machinery and therefore to be held as capital in nature. 4. But, the Commissioner of Income-tax (Appeals) by order dated May 12, 2003, and the Tribunal, by order dated December 30, 2005, have concurrently found that the sum of Rs. 4.4 lakhs, being 1 per cent. of upfront fee, paid by the assessee to the bank, is nothing but the bank charges and the same cannot be construed as a capital expendi....

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....R 686 (Guj), holding that the bank guarantee commission was a revenue expenditure and hence allowable as deduction in computing the income. 8. In view of the above settled proposition of law with regard to issue No.1, we find no substantial question of law to be considered in this appeal with regard to the first issue. 9. With regard to the second issue, viz., remanding the issue of applicability of section 43B of the excise duty and sales tax collection, to the Assessing Officer without treating the collection as trading receipts, the Tribunal has found that there is no evidence as to the details of actual payments of these dues. It is a settled law that any statutory liability towards sales tax, ESI contributions and provident fund ....