Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 2020 (1) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (1) TMI 1472 - SC - Income TaxDeduction of lump sum pre-payment premium paid by the assessee to IDBI allowed by HC - as argued the aforesaid payment represented upfront [present value] of differential rate of interest that would have been on the loan if no restructuring of the debt had taken place - ITAT and the High Court has held that the principle underlying the exposition in Madras Industrial Investment Corporation Ltd. [1997 (4) TMI 5 - SUPREME COURT] has no application to the fact situation of the present case and held that in terms of S. 36(1)(ii) read with S. 2(28A) of the Act prepayment charges being interest paid on moneys borrowed for purposes of business, is to be allowed deduction as revenue expenditure. The prepayment premium being revenue expenditure, is to be allowed deduction in the year of accrual thereof, since the Act does not recognize the concept of deferred revenue expenditure.Besides the above S. 43B(d) also permits claiming deduction on actual payment. Even on this basis the claim of the assessee deserves to be accepted. HELD THAT:- The view so taken by the ITAT commended to the High Court. We find no reason to take a different view in the matter. SLP dismissed.
|