Appeal details
Counselvise Citation
[2014] 140 COUNSELVISE.COM (IT) 83602 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 30 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-08-2014
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
D
Assessment Year
2008-2009
Appeal Filed On
28-01-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 718/MUM/2013 ASSESSMENT YEAR: 2008-09 RELIANCE PETRO MARKETING LTD. COURT HOUSE, 5 TH FLOOR, LOKMANYA TILAK MARG, DHOBI TALAO, MUMBAI- 400 002 VS. ASST CIT RG-7(2) R. NO. 624, 6 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI- 400 020 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- AABCR 1721 M ASSESSEE BY : SHRI ARVIND SONDE REVENUE BY : SHRI SANTOSH KUMAR DATE OF HEARING : 06.08.2014 DATE OF PRONOUNCEMENT : .08.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A)-13, MUMBAI ALL DATED 13.12.2012 FOR THE A SSESSMENT YEARS 2008-09. 2. GROUND NO. 1 IS NOT PRESSED BY THE ASSESSEE AND HENCE THE SAME DOES NOT REQUIRE ANY ADJUDICATION. 3. IN GROUND NO. 2, THE ASSESSEE HAS AGITATED THE D ECISION OF THE LD. CIT(A) CONFIRMING THE ACTION OF THE AO IN HOLDING THAT AN AMOUNT OF RS.4,33,70,530/- OUT OF DISCOUNT ON DEBENTURES AND INTEREST PAID/ PAYABLE D URING THE YEAR OF RS.7,56,82,000/- IS NOT ALLOWABLE AS BUSINESS EXPEN DITURE U/S 36(1)(III) OF THE ACT SINCE THE SAME IS ATTRIBUTABLE TO THE INVESTMENTS. 3.1 AT THE OUTSET, IT IS BROUGHT TO OUR NOTICE THAT THE TRIBUNAL, IN THE ASSESSEES OWN CASE IN ITAT NO. 5642/MUM/2010 FOR THE A.Y. 200 7-08 HAS DECIDED A SIMILAR AND IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. IN T HE SAID DECISION, THE TRIBUNAL HAS OBSERVED THAT IN THE CASE OF THE ASSESSEE, THE DEBE NTURES HAVE BEEN REDEEMED AND ITA NO. 718/MUM/2013 RELIANCE PETRO MARKETING LTD ASSESSMENT YEAR: 2008-09 2 IT IS NOT THE CASE OF CONVERSION INTO SHARES, THERE FORE, IT REMAINS A LOAN THROUGHOUT THE PERIOD TILL IT WAS REPAID BY REDEMPTION OF DEBE NTURE. THE TRIBUNAL IN THE SAID DECISION, BY RELYING ON THE DECISIONS OF THE RAJAST HAN HIGH COURT IN THE CASE OF CIT VS. SECURE METERS LTD. 321 ITR 611 , WHICH HAS FURTHER BEEN UPHELD BY SC AND THE HONBLE APEX COURT IN THE CASE OF S.A. BUILDERS VS. CIT 288 ITR 1 , HAS HELD THAT THE DISCOUNT ON DEBENTURE IS EXPENDITURE FOR RAISING LO AN AND THEREFORE, THE SAME IS ALLOWABLE AS BUSINESS EXPENDITURE. SINCE THE REVENU E HAS NOT BROUGHT ANY DISTINGUISHING FACT DURING THE YEAR UNDER CONSIDERA TION, FOLLOWING THE SAID ORDER OF THE TRIBUNAL, WE DECIDE GROUND NO. 2 IN FAVOUR OF T HE ASSESSEE. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF AUGUST, 2014. SD/- SD/- (RAJENDRA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 27.08.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.
