TMI Blog2003 (3) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... reports given by the auditors, it has been certified that zero interest unsecured redeemable convertible debentures of Rs. 100 each redeemable after ten years at a premium of 100 per cent. had been issued during the assessment year in question. There is no reason for us to discard this note of the auditor. Even in the assessment order, no reasons have been given by the Assessing Officer for discarding this note of the auditors. Lastly, we may point out that even assuming for the sake of argument that the borrower had a discretion to change the terms of the issued debentures, there is nothing in the record to show that during the assessment year in question the borrower had exercised such a discretion - we answer the above quoted question i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch redeemable after ten years at a premium of 100 per cent. These debentures are redeemable after ten years from the date of allotment at a premium of 100 per cent. The assessee claimed before the Assessing Officer a spread over. The assessee claimed that the premium payable by it was Rs. 5,47,50,000 after the expiry of ten years. However, the assessee claimed deduction of Rs. 54,75,000 per annum. The said amount was debited to the profit and loss account for the accounting year ending March 31, 1995. In the annual report, a footnote was added that premium on zero interest unsecured redeemable debentures of Rs. 100 each was redeemable after ten years at a premium of 100 per cent. The Assessing Officer disallowed the assessee's claim for ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Taparia Tools Ltd. v. Joint CIT [2003] 260 ITR 102 (Bom), there was no discretion vested in the assessee to alter the terms of the issued debentures during the subsistence of the issued debentures whereas, in the present case, the borrower had the discretion to change the terms of the issued convertible debentures. He, therefore, submitted that during the assessment year in question, there was no ascertainment of liability to the tune of Rs. 54,75,000 and, therefore, the Assessing Officer was right in disallowing the claim for deduction. Findings: We do not find any merit in the above arguments advanced on behalf of the Department. Firstly, we have gone through the records and proceedings (R P). In the entire R P, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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