TMI Blog2014 (1) TMI 1431X X X X Extracts X X X X X X X X Extracts X X X X ..... sly identified over specified future time periods (e.g., discount on issue of debentures) akin to pre-paid expenses the same would be allowable over the period to which these relate proportionately - when the Tribunal has recorded a finding that the expenses relating to obtaining fixed deposits are closely linked with the business requirement of the assessee, such expenses are allowable expenses – thus, the Tribunal was right in holding that the expenses for obtaining fixed deposits from the public is revenue in nature – the order of the CIT(A) upheld – Decided against Revenue. - I.T.A. No.4245/Ahd/2003 - - - Dated:- 14-8-2013 - Shri A. Mohan Alankamony And Shri Kul Bharat,JJ. For the Appellant : Shri O. P. Batheja, Sr. D. R. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Hon'ble High Court in Tax Appeal No.1068 of 2008, dated 30/06/2011 demanded the appeal for consideration of appeal on merits. 2.1. The only effective grievance is against deletion of disallowance of Rs.18,80,782/- claimed as brokerage and commission. 3. The Sr.DR has strongly supported the assessment order. On the contrary, ld.counsel for the assessee has submitted that this issue is squarely covered by the decision of Hon'ble Special Bench of ITAT Ahmedabad Bench "B" rendered in the case of ACIT vs. Ashima Syntex Ltd. reported at (2009) 117 ITD 01 (Ahd.)(SB), dated 17/10/2008. He submitted that the AO observed that the brokerage paid on fixed deposits was for enduring benefit and these expenses were not debited in P L account, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y capital asset or where the same is not allocable over defined future time periods there can be no case for amortising the same under the Act over the expected period over which the benefit is likely to arise therefrom since in such cases the expenditure is essentially revenue in nature but is amortised in the books only on account of some other considerations." 4.1. In respect of the issue in question, the Hon'ble Special Bench vide paragraph No.15(c) held as under:- "Fixed deposit expenses - In respect of expenses incurred in obtaining fixed deposits, the Hon'ble Madras High Court held in the case of Southern Petrochemical Industries Corpn.Ltd. (supra) that - "As far as the expenses relating to obtaining fixed deposits are concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held that the act of borrowing money was incidental to the carrying on of business, the loan obtained was not an asset or an advantage of enduring nature, the expenditure was made for securing the use of money for a certain period and it was irrelevant to consider the object with which the loan was obtained and, therefore, the amount spent was not in the nature of capital expenditure and was laid out or expended wholly and exclusively for the purpose of the assessee's business and was, therefore, allowable as a deduction. The Apex Court also held that obtaining capital by issue of shares is different from obtaining loan by debentures. In CIT v. Investment Trust of India Ltd. [2003] 264 ITR 506 this Court held that the expenditure o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
