TMI Blog2016 (9) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, the expenses incurred were in respect of issuance of convertible debentures. The facts indicate that a portion of the convertible debentures was converted into equity shares and thereby, the assessee company got enduring benefits. Since capital can be raised by converting debentures into equity shares, we are of the view that expenditure incurred by the assessee on conversion of convert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right in law in holding that expenditure on the issue of convertible debentures is a capital expenditure? 2. Briefly stated, the facts are that the assessee offered to the public 17,33,000 convertible debentures for subscription at the rate of ₹ 75/per debenture. This was in two parts, viz. PartA of ₹ 35 to be compulsorily converted into one equity share of the face value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see filed second appeal before the Tribunal. However, the Tribunal dismissed the appeal vide order dated 24.03.2006. Hence, this Tax Appeal. 4. At the outset, Mr. Soparkar, learned counsel for the assessee, submitted that the controversy raised in this case stands settled by a Division Bench judgment of this Court rendered in Tax Appeal No.73/2002 decided on 03.12.2014 wherein, it has been held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee on conversion of convertible debentures into equity shares would have to be treated as capital expenditure. 6. In view of the above discussion, the appeal is dismissed. The question raised in this appeal is answered against the assessee and in favour of the Revenue. Considering the fact that different views prevail on the subject matter, we grant certificate of fitness in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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