ACIT, CHENNAI V. NDR Warehousing Pvt. Ltd., CHENNAI

ITA 2953/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90581 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U ANJANEYALU
• Keywords: Question of law; Capital receipt; Commercial expediency; Revenue expenditure; Capital expenditure
• Section: 37

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , ' $ , % ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NOS . 2953 &2954/MDS/2014 ( / ASSESSMENT YEARS: 2010-11 TO 2011-12) ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-IV(2) CHENNAI-34. VS M/S. NDR WAREHOUSING PVT.LTD., 5, ERRA BALU CHETTY STREET, CHENNAI-600 001. PAN:AAACN2816J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. U.ANJANEYALU, CIT /RESPONDENT BY : MRS. PUSHYA SITARAMAN FOR J.SREE VIDYA, ADVOCATE /DATE OF HEARING : 24 TH JUNE, 2015 /DATE OF PRONOUNCEMENT : 30 TH JUNE, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: BOTH THESE APPEALS ARE FILED BY THE REVENUE AGAINS T THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)- IV CHENNAI DATED 29.09.2014 FOR THE ASSESSMENT YEARS 2 010-11 AND 2011-12. 2. THE FIRST COMMON GROUND IN BOTH THE THESE APPEAL S OF THE REVENUE IS THAT COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN TREATING THE INCOME FROM LEASING OF WAREHO USING AS INCOME FROM BUSINESS. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITS THAT THIS GROUND OF APPEAL IS COVERE D IN FAVOUR 2 ITA NOS.2953 & 2954/MDS/2014 OF THE ASSESSEE IN ASSESSEES OWN CASE BY THE JURI SDICTIONAL HIGH COURT DECISION FOR THE ASSESSMENT YEARS 2004-0 5, 2005- 06 2007-08 AND 2009-10 (372 ITR 690) (MAD), WHEREIN THE HONBLE COURT HELD THAT INCOME FROM LETTING OUT OF GODOWN AND WAREHOUSE IS INCOME ASSESSABLE AS BUSINESS INCO ME. 3. DEPARTMENTAL REPRESENTATIVE FAIRLY SUBMITS THAT THE HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE. 4. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE, W E DISMISS THE GROUND OF APPEAL OF THE REVENUE ON THIS ISSUE. 5. THE NEXT COMMON ISSUE IN BOTH THESE APPEALS OF T HE REVENUE IS THAT COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN DELETING THE DISALLOWANCE OF PREMIUM PAID ON REDEMPTION OF DEBENTURES. 6. BRIEF FACTS OF THE CASE ARE THAT DURING THESE T WO ASSESSMENT YEARS ASSESSEE HAD REDEEMED DEBENTURES AMOUNTING TO ` 17.52 CRORES AND ` 11.32 CRORES HELD BY KOTAK REALTY FUND AND PAID PREMIUM OF ` 3,95,59,000/- AND 3 ITA NOS.2953 & 2954/MDS/2014 ` 3,18,20,539/- FOR THESE ASSESSMENT YEARS 2010-11 A ND 2011-12 RESPECTIVELY ON SUCH REDEMPTION OF DEBENTUR ES. THE ASSESSEE HAS CLAIMED THESE EXPENSES AS REVENUE EXPE NSES. HOWEVER, THE ASSESSING OFFICER TREATED THESE EXPENS ES INCURRED BY WAY OF REDEMPTION PREMIUM AS CAPITAL EXPENDITURE HOLDING THAT REDEMPTION PREMIUM IS PAID FOR PURCHASING RIGHT OF OPTION OF M/S. KOTAK INDIA REA L ESTATE FUND-I TO CONVERT THE OCDS INTO EQUITY SHARES. THE REFORE, THE ASSESSING OFFICER HELD THAT IT IS A CAPITAL EXP ENDITURE. THE ASSESSING OFFICER WAS OF THE VIEW THAT IF THE INVES TOR I.E. KOTAK INDIA REAL ESTATE FUND MADE AN OPTION TO CONV ERT OCD INTO EQUITY SHARES, THEN THE ASSESSEE WOULD HAV E GOT CAPITAL RECEIPT ON WHICH NO TAX IS REQUIRED TO BE P AID. SIMILARLY THE ASSESSEE HAS PAID REDEMPTION PREMIUM TO INVESTOR BY SURRENDERING THE RIGHT OF OPTION TO CON VERT OCD INTO EQUITY. THUS, HE HELD THAT THE EXPENDITURE IN CURRED BY THE ASSESSEE ON REDEMPTION OF OPTIONALLY CONVERTIBL E DEBENTURES IS CAPITAL EXPENDITURE. ON APPEAL, COMMI SSIONER OF INCOME TAX (APPEALS) REFERRING TO VARIOUS DECISI ONS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. VS . CIT (225 4 ITA NOS.2953 & 2954/MDS/2014 ITR 802) HELD THAT REDEMPTION PREMIUM PAID BY THE A SSESSEE IS REVENUE EXPENDITURE AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 7. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDER OF THE ASSESSING OFFICER IN TREATING REDE MPTION PREMIUM AS CAPITAL EXPENDITURE. 8. COUNSEL FOR THE ASSESSEE SUPPORTS THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND SUBMITS T HAT REDEMPTION PREMIUM PAID IS REVENUE EXPENDITURE . SH E ALSO PLACES RELIANCE ON THE DECISION OF JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS. SOUTH INDIA CORPORATION (AGENCI ES) LTD. (290 ITR 217) AND SUBMITS THAT DEBENTURE ISSUE EXPE NSES ARE ALLOWABLE AS REVENUE EXPENDITURE IN ENTIRETY. 9. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DECISIONS RELIED ON. ON GOING THROUGH THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT THE ISSUE IN APPEAL HAS BEEN ELABORATELY CONSIDERED BY THE COMMISSIONER OF INCOM E TAX (APPEALS) AND HELD THAT EXPENDITURE INCURRED BY THE ASSESSEE BY WAY OF PREMIUM ON DEBENTURES IS ALLOWABLE AS REV ENUE 5 ITA NOS.2953 & 2954/MDS/2014 EXPENDITURE. WHILE HOLDING SO, THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED AS UNDER:- 5.3. COMING TO THE SECOND GROUND, IT HAS BEEN STATED BY THE APPELLANT THAT IT HAD REDEEMED DEBENTURES AMOUNTING TO RS.17.52 CRORES HELD BY KOTAK REALTY FUND AGAINST WHICH A PREMIUM OF RS.3,95,59,000/- WAS PAID AND CLAIMED AS REVENUE EXPENDITURE BY THE APPELLANT COMPANY. THE APPELLANT RELIED ON THE HON'BLE HIGH COURT, BOMBAY IN THE CASE OF CIT II V. RAYMOND LTD. [2012] 208 TAXMANN 454 WHICH IN TURN RELIED UPON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. V. COMMISSIONER OF INCOME TAX [1997] 225 ITR 802, WHEREIN IT HAS BEEN SAID THAT ADDITIONAL LIABILITY EQUIVALENT TO A DISCOUNT REPRESENTS REVENUE EXPENDITURE MUST, BY ANALOGY OF REASONING, APPLY TO THE PREMIUM WHICH WAS PAID BY THE ASSESSEE AT THE TIME OF REDEMPTION OF THE DEBENTURES. THE AR ALSO HAD RELIED ON THE CASE OF CIT V. ASEA BROWN BOVERI LTD. [2009] 316 ITR 450, WHEREIN THE HON'BLE HIGH COURT OF KARNATAKA HAD ADOPTED A SIMILAR STAND WITHOUT REFERRING TO THE NATURE OF DEBENTURES BEING CONVERTIBLE OR NOT. THE AR ALSO FURTHER CONTENDED THAT THE COURTS HAVE NOT DRAWN ANY SPECIFIC DISTINCTION BETWEEN CONVERTIBLE AND NON-CONVERTIBLE DEBENTURES AND THE ISSUE BEFORE THE COURTS HAD BEEN ONE REGARDING THE ALLOWABILITY OF PREMIUM ON REDEMPTION OF DEBENTURES WHICH HAD BEEN UNIFORMLY HELD TO BE REVENUE EXPENDITURE IRRESPECTIVE OF WHETHER 6 ITA NOS.2953 & 2954/MDS/2014 THE DEBENTURES WERE CONVERTIBLE OR NOT. 5.4. HOWEVER THE AD HAS DISALLOWED THE CLAIM ON THE GROUND THAT THE ABOVE MENTIONED CASES DEALT WITH NON- CONVERTIBLE DEBENTURES WHEREAS IN THE PRESENT APPEAL, THE ISSUE IS REGARDING PREMIUM PAID ON CONVERTIBLE DEBENTURES AND ACCORDING TO THE AD WHAT THE APPELLANT REPURCHASED WAS THE RIGHT TO CONVERT DEBENTURES INTO EQUITIES AND HENCE PREMIUM PAID THEREON WAS CAPITAL IN NATURE. 5.5. THE AR HAS FURTHER SUBMITTED THAT THE DISTINCTION SET TO BE MADE OUT BY THE AD REGARDING CONVERTIBLE AND NON-CONVERTIBLE DEBENTURES IS ARTIFICIAL AND WITHOUT SUBSTANCE AND THAT IN THE FIRST PLACE, IN THE DECISION OF THE APEX COURT IN THE CASE OF MADRAS INDUSTRIAL CORP. V. CIT CITED SUPRA, THE COURT DID NOT MAKE ANY DISTINCTION BETWEEN CONVERTIBLE AND NON-CONVERTIBLE DEBENTURES AND HELD THAT THE DEBENTURES CONSTITUTED INSTRUMENTS OF LOAN AND THEREFORE ANY PREMIUM PAID WAS REVENUE IN NATURE. 5.6. IT HAS BEEN FURTHER AVERRED BY THE AR THAT THE FINDING OF THE AD THAT THE APPELLANT HAD PAID THE PREMIUM IN RELATION TO REPURCHASE OF ANY RIGHT IS FACTUALLY INCORRECT AND WHAT THE APPELLANT HAD DONE WAS TO PERMIT THE DEBENTURE-HOLDERS TO REDEEM THEIR DEBENTURES WITHOUT SEEKING ANY CONVERSION INTO EQUITIES AND THAT DID NOT MEAN THAT THE APPELLANT HAD ACQUIRED ANY RIGHT OF CONVERSION AND AS A MATTER OF FACT THE APPELLANT COULD ISSUE EQUITIES EVEN OTHERWISE AND DID NOT REQUIRE 7 ITA NOS.2953 & 2954/MDS/2014 ANY RIGHT TO BE CONFERRED ON THEM THROUGH REPURCHASE OF THE CONVERTIBLE DEBENTURES. 5.7. IT HAS BEEN FURTHER ASSERTED BY THE AR THAT IT WAS NOT THE INTENTION OF FUNDS SUCH AS KOTAK INDIA REAL ESTATE FUND (THE DEBENTURE-HOLDERS IN THE INSTANT CASE) TO RETAIN EQUITY INVESTMENT IN THE COMPANIES THAT THEY FUND AND THAT THEIR OBJECTIVE WAS TO ENSURE A FAIR RETURN ON THEIR INVESTMENT AND ALWAYS PREFERRED TO EXIT THE INVESTMENT ONCE THIS OBJECTIVE WAS ACHIEVED AND THEREFORE THE PRIMARY REASON FOR INSISTING ON OPTIONALLY CONVERTIBLE DEBENTURES WAS TO SAFEGUARD THEIR INVESTMENT IN THE CASE OF THE INVESTEE-COMPANY RUNNING INTO FINANCIAL AND F OR OTHER TROUBLES AND IN SUCH AN EVENTUALITY, THE DEBENTURE-HOLDER WOULD BE IN A POSITION TO PARTICIPATE IN THE RUNNING OF THE COMPANY BY RETAINING THE FLEXIBILITY OF OBTAINING EQUITY SHARES IN LIEU OF THE DEBENTURES AND THIS WAS THE REASON FOR THE OPTION OF CONVERTIBILITY BEING AVAILABLE TO THE DEBENTURE-HOLDER NOT JUST AT REDEMPTION BUT AT ANY TIME BEFORE AS WELL AND SINCE THERE WAS NO EVENTUALITY PROMPTING SUCH CONVERSION, THE DEBENTURE-HOLDER CHOSE TO EXIT THE INVESTMENT WITH THE RETURN DUE TO IT. IT HAS ALSO BEEN STATED THAT WHETHER CONVERTIBLE OR OTHERWISE, THE DEBENTURES CONSTITUTED MERE LOANS WHICH DID NOT CONFER ANY ENDURING ADVANTAGE TO THE APPELLANT AND THEREFORE ANY PREMIUM PAID ON REDEMPTION WAS ONLY IN THE NATURE OF REVENUE OUTGO. 5.8. THE AD HAS CONTENDED THAT REDEMPTION PREMIUM IS PAID FOR PURCHASING THE RIGHT OF OPTION OF 8 ITA NOS.2953 & 2954/MDS/2014 M/S.KOTAK INDIA REAL ESTATE FUND-1 (INVESTOR) TO CONVERT THE DCDS INTO EQUITY SHARES WHEN IN FACT THE AD HAS HIMSELF STATED IN THE ASSESSMENT ORDER THAT CONSEQUENT TO PASSING OF RESOLUTION AT THE MEETING OF THE BOARD OF DIRECTORS OF THE COMPANY HELD ON 31 ST MARCH, 2010, THREE LAKHS OPTIONALLY CONVERTIBLE DEBENTURES WHICH WERE ISSUED AND ALLOTTED TO THE INVESTORS ON 18.9.2007 FOR A 4 YEAR TERM WERE PREMATURELY REDEEMED BEFORE JUNE 30,2010 TOGETHER WITH THE INTEREST AND PREMIUM ON REDEMPTION. 5.9 ONCE THE INVESTOR PREMATURELY REDEEMS THE DEBENTURES, BY WRITTEN NOTICE TO THE COMPANY AS MANDATED, IT MEANS THAT IT HAS NOT EXERCISED THE OPTION AND NOT CONVERTED THE DEBENTURES INTO EQUITY SHARES AND AS SUCH THE INVESTOR WAS NOT ENTITLED TO ANY RIGHTS AND PRIVILEGES AS SET OUT IN THE SHAREHOLDERS AGREEMENT AND IN FACT FORFEITS THE SAME AND SINCE THE UNCONVERTED REDEEMED DEBENTURES WHICH WERE NOT CLEARLY IDENTIFIABLE AS EQUITY CAPITAL AND SINCE THE CONVERSION WAS NOT MANDATORY AS IN THE INSTANT CASE THE CONVERTIBLE PART OF THE DEBENTURES WHICH WAS REDEEMED UNCONVERTED BY THE INVESTOR ESSENTIALLY PARTOOK THE CHARACTER OF A LOAN AND THE REDEMPTION PREMIUM PAID BY THE COMPANY WOULD BE AN EXPENDITURE INCURRED BY IT TO STOP FUTURE INTEREST PAYMENTS BY WHICH THE COMPANY DISCHARGES ITS LIABILITIES BY REPAYING IT WITH AN ADDITIONAL AMOUNT OF INTEREST IN ORDER TO SERVICE THE LOAN AND THEREFORE NOT PAYMENT MADE FOR THE PURCHASE OF RIGHTS TO CONVERT THE CONVERTIBLE DEBENTURES INTO EQUITY AS CONTENDED BY THE AO. 5.10. IT HAS BEEN HELD BY THE HON'BLE 9 ITA NOS.2953 & 2954/MDS/2014 SUPREME COURT IN THE CASE OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD. V. CIT [225 ITR 802] THAT IN DECIDING WHETHER A PAYMENT IS DEDUCTIBLE EXPENDITURE ONE HAS TO TAKE INTO CONSIDERATION THE QUESTION OF COMMERCIAL EXPEDIENCY AND THE PRINCIPLES OF ORDINARY COMMERCIAL TRADING. FURTHER, THE AMOUNTS OBTAINED BY ISSUE OF DEBENTURES AND USED BY THE COMPANY UNDISPUTABLY FOR THE PURPOSE OF BUSINESS AS IN THE INSTANT-CASE AND THEREFORE ANY EXPENDITURE RELATING THERETO INCLUDING REDEMPTION PREMIUM PAID THEREON WOULD BE REVENUE EXPENDITURE IN THE LIGHT OF THE RATIO LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF INDIA CEMENTS V. CIT [60 ITR 52] WHEREIN IT HAS BEEN CLEARLY HELD THAT LIABILITY INCURRED FOR THE PURPOSE OF OBTAINING LOAN AS IT IS IN THE CASE OF THE INSTANT ASSESSEE, WHERE THE ISSUE OF DEBENTURES WAS ESSENTIALLY TO RAISE LOANS, FOR THE PURPOSE OF ITS BUSINESS, WOULD BE REVENUE EXPENDITURE IN NATURE. 5.11. IT HAS BEEN FURTHER HELD IN THE CASE CITED SUPRA THAT ORDINARILY A REVENUE EXPENDITURE WHICH IS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS MUST BE ALLOWED IN ITS ENTIRELY IN THE YEAR IN WHICH IT IS INCURRED AND IT CANNOT BE SPREAD OVER A NUMBER OF YEARS EVEN IF THE ASSESSEE HAS WRITTEN IT OFF IN THE BOOKS OVER A PERIOD OF YEARS. THEREFORE, THE REDEMPTION PREMIUM PAID OF RS. 3,95,59,000/- HELD AS REVENUE EXPENDITURE SUPRA IS ALLOWABLE ENTIRELY FOR THE ASSESSMENT YEAR IN APPEAL NAMELY 2010-11. ACCORDINGLY, THIS GROUND IS ALLOWED. 10 ITA NOS.2953 & 2954/MDS/2014 10. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CI T VS. SOUTH INDIA CORPORATION (AGENCIES) LTD. (SUPRA) HE LD THAT EXPENSES INCURRED ON PARTLY CONVERTIBLE DEBENTURE A RE ALLOWABLE AS REVENUE EXPENDITURE IN ENTIRETY. THE HONBLE HIGH COURT HELD THAT DEBENTURE ISSUE EXPENSES INCUR RED ON PARTLY CONVERTIBLE DEBENTURES CANNOT BE TREATED AS PARTLY CAPITAL EXPENDITURE ON THE REASONING THAT AT THE TI ME OF REDEMPTION OF DEBENTURES, HOLDERS OF DEBENTURES WOU LD BE ENTITLED TO CERTAIN SHARES. IT WAS HELD THAT THE IS SUE OF SHARES IS A FUTURE EVENT WHICH MAY OR MAY NOT BE HAPPENED. THUS, IT WAS HELD THAT ENTIRE EXPENDITURE IS ALLOWABLE AS R EVENUE EXPENDITURE. WHILE COMING TO THIS CONCLUSION, THE H ONBLE HIGH COURT HELD AS UNDER:- 3.2 THIS QUESTION PERTAINS TO THE ASST. YRS. 1989- 90 AND 1992-93. FOR THE RELEVANT ASSESSMENT YEARS, THE ASSESSEE CLAIMED CERTAIN EXPENDITURE AS DEBENTURE ISSUE EXPENSES. THE AO TREATED 60 PER CENT OF THE CLAIM OF EXPENDITURE AS CAPITAL EXPENDITURE AND THE BALANCE 40 PER CENT AS REVENUE EXPENDITURE. AGGRIEVED BY THE SAME, THE ASSESSEE FILED AN APPEAL TO THE CIT(A). THE CIT(A) CONFIRMED THE ORDER OF THE AO AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL TO THE INCOME- TAX APPELLATE TRIBUNAL (HEREINAFTER REFERRED TO AS THE 'TRIBUNAL'). THE TRIBUNAL HELD AS FOLLOWS: 'THE LAST OF THE ISSUE IS WITH REGARD TO 11 ITA NOS.2953 & 2954/MDS/2014 EXPENSES INCURRED ON DEBENTURE ISSUE BEING TREATED AS CAPITAL EXPENDITURE. THE AUTHORITIES HAVE TREATED PART OF THE EXPENDITURE AS CAPITAL EXPENDITURE ON THE REASONING THAT AT THE TIME OF REDEMPTION OF THE DEBENTURE, THE HOLDERS OF THE DEBENTURES WERE ENTITLED TO CERTAIN SHARES. THE ISSUE OF SHARES IS A FUTURE EVENT WHICH MAY OR MAY NOT HAPPEN. AT PRESENT, THE EXPENDITURE INCURRED WAS ON THE ISSUE OF DEBENTURES ONLY AND HENCE THE EXPENSES INCURRED ON OBTAINING A LOAN IS A REVENUE EXPENDITURE. WE ACCORDINGLY UPHOLD THE CLAIM OF THE ASSESSEE.' 3.3 THE AO HAD BIFURCATED THE EXPENDITURE AND ALLOWED ONLY 40 PER CENT AS REVENUE EXPENDITURE, WITHOUT ANY BASIS. THE TRIBUNAL CORRECTLY HELD THAT THE DISALLOWANCE OF 60 PER CENT IS WITHOUT ANY BASIS AND THE AO WAS WRONG IN TREATING PART OF THE EXPENDITURE AS CAPITAL EXPENDITURE ON THE REASONING THAT AT THE TIME OF REDEMPTION OF DEBENTURES, THE HOLDERS OF THE DEBENTURES WOULD BE ENTITLED TO CERTAIN SHARES. THE ISSUE OF SHARES IS A FUTURE EVENT WHICH MAY OR MAY NOT HAPPEN. 3.4 THE TRIBUNAL CONSIDERED AND FOLLOWED THE PRINCIPLES ENUNCIATED IN THE APEX COURT JUDGMENT REPORTED IN INDIA CEMENTS LTD. VS. CRR (1966) 60 ITR 52 (SC), WHICH, IN FACT, WAS FOLLOWED BY THE DELHI HIGH COURT IN CIT VS. THIRANI CHEMICALS LTD. (2006) 204 CTR (DEL) 146 HOLDING THAT EXPENDITURE INCURRED ON THE ISSUE OF DEBENTURES IS A PERMISSIBLE DEDUCTION UNDER S. 37 OF THE ACT. 3.5 THE LEARNED COUNSEL APPEARING FOR THE REVENUE HAS NOT PRODUCED ANY MATERIAL OR EVIDENCE TO TAKE A DIFFERENT VIEW. THE REASONING OF THE TRIBUNAL WAS BASED ON RELEVANT MATERIALS AND EVIDEN CE AND THERE IS NO ERROR OR INFIRMITY IN THE ORDER OF THE TRIBUNAL TO WARRANT INTERFERENCE. IN VIEW OF THE SA ME, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATIO N BY THIS COURT AND HENCE, THE APPEAL IN RESPECT OF QUES TION NO.1 IS DISMISSED. 12 ITA NOS.2953 & 2954/MDS/2014 11. RESPECTFULLY FOLLOWING THE SAID DECISION, WE UP HOLD THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S). FURTHER, THE REVENUE HAS NOT REBUTTED ANY OF THE FI NDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN COMING TO THE CONCLUSION THAT THE PREMIUM PAID ON REDEMPTION OF DEBENTURES IS REVENUE EXPENDITURE. THE GROUNDS RAIS ED BY THE REVENUE ARE REJECTED. 12. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2015. SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAGENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER ( /CHENNAI, , /DATED 30 TH JUNE, 2015 SOMU ./ 0/ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .