TaxTMI 
TaxTMI 
2021 (7) TMI 1181
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....) under s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (the Act) concerning assessment year 2008-09. 2. We shall first take up Revenue's appeal in ITA No. 2788/Ahd/2015 concerning A.Y. 2008-09. ITA No. 2788/Ahd/2015-AY-2008-09 (Revenue's appeal) 3. The ground of appeal raised by the Revenue reads as under:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in deleting the addition of Rs. 151.81 lakhs made on account of disallowance of claim of guarantee fees paid to Government of Gujarat. The disallowance was made by disallowing the claim as revenue expenditure as it is of enduring nature in the assessee's business and hence capital in nature." 4. When the matter was called for ....
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.... In the past, GEB had issued bonds and other financial instruments for raising funds from the public and from financial institutions, GOG guaranteed to the public and the financial institutions that in case of failure on the part of GEB to redeem the bonds and other financial instruments, the same would be made good by the Government of Gujarat, In lieu of this, commission @ 1% of the outstanding value of unsecured loans was charged from the assessee. No capital expenditure was involved. Hence the addition of Rs. 8,39,04,550/- may be deleted. 5.2. I have considered the submissions of the ld. A.R. and the facts of the case. The issue relating to whether an item of expenditure lies in the capital or the revenue field has exercised the court....
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....at the payment of commission for guaranteeing repayment of loan was allowable as revenue expense. In the instant case, the loan has been guaranteed by the Government of Gujarat. Hence, quite apart from the other sound reasons for treating the expenditure as revenue, it would be unrealistic to say that the appellant company could derive any undue advantage or collateral benefit by making such payment to the GOG. In view of the totality of the circumstances, I am of the opinion that the A.O. was not justified in treating the payment of guarantee commission (Rs. 8,39,04,550/-) as capital in nature. The addition is directed to be deleted." 5.1.5. Besides, the Hon'ble Supreme Court of India in its decision in the case of Sivakami Mills Ltd....
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....rior period Expenses inter-alia included an item of Rs. 2664.86 lacs being the excess provision written back which was already offered as income in earlier years and has been taxed twice by disallowing during the year." 9. When the matter was called for hearing, the learned counsel for the assessee adverted our contention to the decision rendered by the Tribunal in Gujarat Urja Vikas Nigam Ltd. vs. ACIT ITA No. 996/Ahd/2011 order dated 31.05.2017 and submitted that the prior period expenses claimed is without any tax advantage and revenue neutral in nature. 10. The learned DR for the Revenue, on the other hand, relied upon the observations made in assessment order and the first appellate order. 11. We have carefully considered the rival ....