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M/s Tidel Park Ltd. Versus The Assistant Commissioner of Income Tax

2016 (3) TMI 633 - ITAT CHENNAI

Disallowance of the premium paid - Held that:- Since the assessee has ignored the premium paid on purchase of bonds and claimed premium portion also as interest, the Assessing Officer has not accepted and therefore, the difference of income payable of ₹ 20,35,000/- was added to the income of the assessee under the head "income from other sources". After considering the submissions of the assessee and also considering the facts of the case, the ld. CIT(A) has observed that the assessee has .....

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ther, while redeeming the bonds, the ICICI Ltd. has also done TDS on the maturity value minus face value. Since the assessee has ignored the premium paid on purchase of bonds and claimed the same also as interest, the ld. CIT(A) has rightly observed that it is not an allowable expenditure. Accordingly, the ld. CIT(A) correctly sustained the addition made by the Assessing Officer. Under the above facts and circumstances, we find no infirmity in the order passed by the ld. CIT(A). - Decided agains .....

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isallowance of the premium paid of ₹ 20,35,000/-. The assessee has also raised an alternative plea that the premium paid be treated as purchase cost of the bond and deducted from the maturity value of the bond and should treated as allowable expenditure. 2. Brief facts of the case are that the assessee is engaged in the promotion of Information Technology Park and filed its return admitting NIL income. The return filed by the assessee was processed under section 143(1) of the Income Tax Ac .....

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the Act was also issued on the assessee. Further, during the course of hearing, the assessee was asked to produce certain details and with regard to the purchase and sale of ICICI Bonds and the assessee has also submitted all the documents and the same were verified by the Assessing Officer. After verification of documents filed by the assessee and considering the submissions of the assessee, the Assessing Officer completed the assessment under section 143(3) r.w.s. 147 of the Act by assessing t .....

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essee has purchased bonds issued by ICICI Ltd. from ICICI Security & Finance Co. Ltd. who were the holder of the bonds at that time. On the date of maturity, ICICI ltd. paid the maturity value to the owner of the bonds. The assessee was the owner of the bonds at the time of maturity and hence received the maturity value and was deducted TDS on the gross value of interest. From the copies of bonds, the Assessing Officer has noted that the assessee is not the direct purchaser of bonds but purc .....

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s. Bonds (value in Rs.) Accrued interest till purchase (Rs.) Premium Purchase (Rs.) 5,00,00,000 24,82,876.71 9,55,000 15,00,00,000 1,14,75,000.00 10,80,000 6. The assessee has already paid the interest components of ₹ 0.24 crores and ₹ 1.14 crores along with face value and premium to the previous bond holders ICICI Security & Finance Co. on cum interest price basis. The Assessing Officer further observed that on the date of maturity, the assessee received an amount equal to the m .....

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edeeming the bonds has deducted tax at source on the maturity value minus face value without recognizing the purchase price of the assessee as tabulated below: Bond I Bond II Total maturity value 5,76,27,397 17,07,49,315 Less: Face value 5,00,00,000 15,00,00,000 Premium paid 9,55,000 10,80,000 Interest paid 24,52,876.71 1,14,75,000 Actual interest received with TDS 76,27,397 2,07,49,315 Interest income to the assessee 51,44,521 92,74,315 Interest income shown by the assessee 41,89,520 81,94,315 .....

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