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TMI Blog2016 (7) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... - REV. PET. 308/2015 IN ITA 110/2005 - - - Dated:- 22-7-2016 - MR. S. RAVINDRA BHAT MR. R.K. GAUBA JJ. Petitioner Through: Sh. Rahul Chaudhary, Sr. Standing Counsel with Sh. Anup Kesari, Advocate. Respondent Through: Sh. Bishwajit Bhattacharyya, Sr. Advocate with Sh. Chandrachur Bhattacharyya, Advocate. MR. JUSTICE S. RAVINDRA BHAT 1. This review petition by the assessee seeks recall of the judgment and order of this court, dated 18.05.2015, allowing the revenue s appeal under Section 263-A of the Income Tax Act ( the Act ). 2. The brief facts are that the assessee claimed deduction to the tune of ₹ 2,84,71,384/-under Section 43B of the Act, in the computation of income. The interest was paid to the financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Boda Co. (P.) Ltd v Central Board of Direct Taxes 223 ITR 271; the assessee had successfully contended that in a case involving receipt as well as payment, a single entry for the net effect would suffice instead of a two way traffic of separate entries of receipt and payment. The assessee had in addition, in the appeal before this court, relied on Standard Chartered Bank v Andhra Bank, 2006 (6) SCC 94 which had held that a debenture amounted to an actionable claim. The revenue had relied on the decision reported in Kalpana Lamps and Components Ltd. v. DCIT, (2001) 255 ITR 491, where it was held that mere postponement of the liability to pay interest does not amount to discharge, whether actual or constructive and, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nior counsel Mr. Bishwajit Bhattacharyya, that there are glaring errors in the judgment of which review is sought. It is urged that this Court failed to attach due importance to the binding dicta in Standard Chartered (supra). It was submitted that the Court held that since there is no prescribed mode of transfer of debenture under the Transfer of Property Act and given that it is an actionable claim, the issuance of debentures by the assessee amounted to discharge of its interest liability which qualified its claim under Section 43B. Learned counsel placed great reliance on Sunrise Associates vs Govt. of NCT of Delhi Ors. 2006 (5) SCC 603 , where it was observed as follows: Consequently an actionable claim is movable property and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and that that was the difference between 'actionable claims' and those other goods which are covered by the definition of 'goods' in the Sale of Goods Act, 1930 and the Sales Tax Laws. The assumption was fallacious and the conclusion in so far as it was based on this erroneous perception, equally wrong. The Transfer of Property Act, 1882, deals with transfer of actionable claims in Chapter VIII of that Act. Section 130 of the Transfer of Property Act provides that an actionable claim may be assigned for value. A right on the fulfillment of certain conditions to call for delivery of goods mentioned in a contract is an actionable claim and assignable under Section 130. ( See Jaffer Meher Ali Vs. Budge-Budge Jute Mills Co.(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that debentures are securities, by virtue of their definition and they are freely tradable. If the holder of a debenture so desires, it can secure the underlying amount; in fact they are marketable securities. Therefore, this court fell into error in answering the question of law against the assessee and in favour of the revenue. He lastly faulted the judgment inasmuch as it proceeded to answer a question different from what was originally framed. It was highlighted that instead of deciding whether funding of interest liability through debenture qualified for benefit under Section 43-B, this court erroneously answered the following question: Whether the funding of the interest amount by way of a term loan amounts to actual payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a specified amount with interest and although the money raised by the debentures becomes a part of the company s capital structure yet it does not become a share capital. In any event, a debenture would not come within the purview of the definition of goods, inasmuch as, although the shares and stocks are included in the definition of goods but debentures are not. Thus, though debentures are securities and are actionable claim the essential fact is that they are instruments of debt, by the company acknowledging its indebtedness to pay the amount specified. Does this amount to payment under Section 43-B. This court is of opinion that there is no question of any error in the judgment under review. The clear purport of the statute- i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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