Non-convertible debenture redemption premium is allowable expenditure; liability arises at issuance per Section 37 of Income Tax Act.

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....Disallowance of premium payable on redemption of debentures - addition on account of claim of premium on non-convertible debentures on proportionate basis - the moment the debentures were issued, the liability had arisen against the assessee which would constitute on expenditure allowable u/s 37 - Claim on proportionate basis cannot be disallowed - AT....