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TMI Blog2014 (12) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... verted into equity shares and assessee company had got enduring benefits and therefore, the expenditure incurred by the assessee on conversion of convertible debentures into equity shares has to be treated as capital expenditure - the Assessing Authority disallowed expenditure only to the extent pertaining to the convertible portion of the expenditure which formed part of the capital – Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Tribunal was right in allowing the entire expenditure on issue of partly convertible debenture into equity shares as revenue expenditure?" 5. We have heard learned counsel for both the sides. The question raised in this appeal is already concluded by a decision of this Court passed in Tax Appeal No.481/1999 & 482/1999 decided on 02.07.2009. The observation s made in Paras - 7 to 9 of the said decision are relevant and it reads as under; "7. We heard learned Senior Counsel appearing for either side at length. Facts would clearly indicate that assessee company had issued convertible debentures of ₹ 125/- each of which ₹ 45/- each was to be converted into three shares on 1.7.1983 during the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residual claim on the earnings and assets of a company and are paid their share of the company's profit after all other claims are met, and in the event of liquidation of the company, they share whatever is left of the company after all its creditors have been paid. They enjoy limited liability i.e. liability only to the extent of their share-holding and they are only entitled to vote at the company's meetings, thus controlling the management. If the company prospers, it is the equity shareholder who is the greatest gainer. Therefore, in our view, when the debentures are converted into equity shares, the assessing company has already got enduring benefit and the expenditure incurred by the conversion of equity shares has to be treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly answered in the negative in favour of the Revenue and against the Assessee. Consequently, appeals are allowed and the order of the Tribunal is set aside." 5.1 It is reported by learned Senior Counsel Mr. Soparkar that the aforesaid decision of this Court has not been carried in appeal before the Apex Court. Learned counsel for the Revenue was not in a position to dispute the proposition of law laid down in the aforesaid decision. 6. Considering the facts of the case, we concur with the view taken by the coordinate Bench of this Court in the above-referred decision and accordingly, we answer the question in favour of the assessee and against the Revenue. 7. Since we are concurring with the view taken in the above decision, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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