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2022 (8) TMI 914 - HC - Income TaxClaim of Deduction/ expenses on interest/redemption premium on debentures - liability to pay interest/redemption premium has not crystallized during the year - CIT-A allowed the deduction of premium on redemption of debentures as revenue expenditure, which would be spread over to three assessment years - ITAT reversed the order of CIT(A) and restored the order of AO - Whether the Tribunal is justified in law in holding that the genuineness of the Transaction has not been proved beyond doubt without passing a speaking order and ignoring the irrefutable evidence placed before it and consequently passed a perverse order on the facts and circumstance of the case? - HELD THAT:- Issuance of debentures is not in dispute. Deduction of TDS (Tax deducted at source) is also not in dispute. The Tribunal has rightly recorded the correct principle of law that premium paid on redemption of debenture is Revenue expenditure. By the second Addendum Agreement dated 12.11.2012, the HDFC's right to exercise the option of converting the debentures into preference shares has been restored in consonance with the original Agreement. The resultant position is, the HDFC, at its option, could cause the assessee to redeem all debentures on September 20, 2012. The CIT(A) has accepted assessee's explanation that it had quantified the premium as per the agreement dated 15.05.2010 spread over for three financial years. It is trite that a borrowing Company, which issues debentures incurs liability to pay larger amount than what it has borrowed. The assessee - Company has made provision for payment of premium and also paid TDS. The adverse finding recorded by the ITAT that the parties had changed the agreement to suit their convenience and that it is a 'make-believe' story is not supported by any cogent reason nor material on record and therefore, untenable. CIT(A), following the decision in CIT Vs. Asea Brown Boveri Ltd. [2008 (8) TMI 348 - KARNATAKA HIGH COURT] and Madras Industrial Investment Corporation Ltd.[1997 (4) TMI 5 - SUPREME COURT]has rightly held that the premium payable quantified on redemption of debentures as Revenue expenditure. The impugned order passed by the ITAT is unsustainable and hence, this appeal merits consideration.- Decided in favour of assessee.
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