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TMI Blog2013 (8) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... in allowing an expenditure of Rs.10.50 Lacs as an expenditure incurred on feasibility study of a project which was ultimately abandoned ?" II. "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that premium amounting to Rs. 23,80,000/paid on redemption of debentures has to be allowed in the year of payment and not following the ratio of the Hon'ble Supreme Court's decision in the case of Madras Industrial Investment Corporation Ltd. Vs. CIT, reported in (1997) 225 ITR 802, which is directly applicable to the facts of the case ?" III. "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the disallowance of the claim of deduction on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee is not engaged in leasing business ?" VII. "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in law in ignoring the fact that the assessee is not the owner of the assets and that the essence of the agreement is drawn for securing depreciation benefits for the lessor ?" 2. With respect to Question [I], counsel for the Revenue pointed out that the Tribunal had relied solely on the decision in case of assessee for the earlier years, which has been challenged by the Revenue in Tax Appeal No. 2033 of 2009. Such Tax Appeal is admitted. This question, therefore, in our opinion requires to be considered. 3. With respect to Question [II], we noticed that the assessee had paid premium of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking into account the period of 12 years which was the period of redemption and dividing the amount of Rs.3 lakhs over the period of 12 years. The Incometax Officer disallowed the claim but the appellate Assistant Commissioner allowed the deduction of Rs.12,500. The Tribunal held that the entire expenditure of Rs.3,00,000 was allowable as expenditure for the year of issue incurred for the purpose of business. On a reference, the High Court noted that out of the total discount of Rs.3,00,000 an amount of Rs.12,500 had been allowed which the Department had not challenged. Hence, the High Court was concerned only with the balance amount of Rs.2,87,500 which the High Court held, could not be considered as expenditure. On appeal appeal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g nature. Any expenditure incurred to secure money at lower interest would therefore, have to be allowed as a business expenditure. The Tribunal relied on the decision of the Apex Court rendered in case of India Cements Limited v. Commissioner of Income Tax, Madras, reported in [(1966) 60 ITR 52]. 4.2 We are of the view that the Tribunal correctly judged the issue. In case of India Cements Limited [Supra], the Supreme Court held and observed that the act of borrowing money was incidental to carrying on of the business, the loan obtained was not an asset or an advantage of enduring nature, the expenditure so made for securing the use of money for a certain period and it was irrelevant to consider the object with which the loan was obtained. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt of successive claim of tax holiday, the Court held that the ITO was not justified in refusing to continue the benefit of such tax holiday granted to the assessee in the earlier years, without disturbing the relief granted for the initial years. We are conscious that the issue is not identical in nature. However, the Incometax Act recognizes the principle of consistency. In the present case, for as many as seven years, previously the Assessing Officer did not dispute certain claims and therefore, the Tribunal correctly interpreted that the Assessing Officer has sought to reopen the issue. 6. Question V pertains to deduction claimed by the assessee under Section 36[1](iii) of the Act. The Assessing Officer disallowed claim, upon which ult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease were questioned by the Assessing Officer. The Assessing Officer's stand appears to be that the assessee did not retain its interest in the leased out equipments. The Tribunal reversed the order of the Revenue authorities, making following observation : " 35. We have heard the rival contentions and perused the facts of the case. As regards reliance on the decision of he Hon'ble Supreme Court in the case of Asea Brown Boveri Ltd. (supra) by the learned DR, the arguments of the learned DR that the assessee had purchased the equipments for the economic life of the plant itself and not more than that. As a matter of fact, it is not a case, as is appearing from different clauses of the lease deed that the equipments leased will be returne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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