2022 (4) TMI 626

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.... Petitioner reads as under : "xxxxxxxxx The Hon'ble Supreme of Vijaya Bank Ltd. Vs. Addl. CIT (1991) 187 ITR 541 (SC) has clearly stated that broken period interest is part of capital outlay for acquisition of securities and is hence not allowable. Circular No.665/1993 issued by CBDT also states that broken period interest is not allowable on investments as the same constitutes capital expenditure. In AY 2010-11, disallowance is made in respect of broken period interest in the case of the assessee bank as the same is capital expenditure. It is observed that no disallowance is made in AY 2008-09 with respect to broken period interest in the case of the assessee. xxxxxxxxx" 2] Therefore, according to Res....

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....ing the assessment proceedings, Petitioner was called upon to, by a letter dated 16th September, 2010 from DCIT, to file complete details of broken period interest as on 31^st March, 2008 and also explain as to why the same should not be taken into income and taxed accordingly. Petitioner filed its response by a letter dated 11th October, 2010 and informed DCIT that Petitioner has been consistently treating the broken period interest as revenue item. In earlier years, the same was disallowed by the Assessing Officer and allowed by the Commissioner of Income Tax (Appeals) and in view of the Supreme Court's decision in favour of Bank by dismissing the Special Leave Petition filed by department against Judgment of this Court in the case of Ame....