TMI Blog2017 (5) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... ces we are of the view that there is no merit in this appeal filed by the revenue. Accordingly both the appeals of the revenue are dismissed. - I.T.A Nos. 1906 & 1907/Kol/2014 - - - Dated:- 19-5-2017 - Sri N.V.Vasudevan, JM And Shri Waseem Ahmed, AM For The Appellant : Shri Saurabh Kumar, Addl. CIT, Sr.DR For The Respondent : Shri D.S.Damle, FCA ORDER Per N.V.Vasudevan, JM These are appeals by the Revenue against two orders dated 25.07.2014 and 23.07.2014 respectively of C.I.T.(A)-XII, Kolkata relating to A.Y.2003-04 2004-05. 2. The common issue that arises for consideration in both these appeals by the revenue is as to whether the CIT(A) was justified in coming to the conclusion that the interest paid on d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed was the subject matter of consideration by this Tribunal in assessee s own case for A.Y.2001-02 in ITA No.816/Kol/2005 and this Tribunal by its order dated 13.10.2006 was pleased to hold that the payment of interest was held to be an allowable deduction. 4. The brief facts with regard to acquisition of debentures was that the assessee purchased 32,00,000 of debenture of ₹ 100/- each held by M/s. Spencer International Hotels Ltd on 29.09.1998 from M/s. Ceat Ltd which was the registered debenture holder. As per the agreement with M/s. Ceat Ltd the assessee was to pay 10% interest to M/s. Ceat Ltd on unpaid purchase consideration. The assessee had showed debentures as investment in its books of accounts. But in the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther been contended that such claim of interest by the assessee was accepted by the revenue in earlier years and such contention of the assessee has not been controverted by the ld. Departmental Representative for the Revenue before us. The main objection raised by the Revenue while treating such debentures as investment is based upon the treatment of such debentures in balance- sheet, wherein such investment in debentures has been shown as investment and not as stock-in-trade. However. it is also relevant to note that the assessee' is treating such investment in debentures as business asset, which was also accepted by the Department in the earlier assessment. Apart from the above facts, it' is also an undisputed fact that the mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Tribunal in A.Y.2001-02 the revenue preferred an appeal before the Hon ble Calcutta High Court in ITA No.105 of 2007 and the Hon ble Calcutta High Court by its order dated 04.05.2016 dismissed the appeal of the assessee observing that the finding concurrently recorded by CIT(A) and the Tribunal was that debentures were held by way of business assets and that finding were not challenged by the Revenue. The Hon ble Calcutta High Court therefore held that interest expenditure is allowable u/s 36(1)(iii) of the Act. 7. It is not in dispute before us that the facts and circumstances under which the disallowance was made by AO and deleted by CIT(A) in A.Y.2003-04 and 2004-05 are identical to the facts and circumstances as it prevai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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