TMI Blog2006 (9) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... lding that the bank guarantee commission was a revenue expenditure and hence allowable as deduction in computing the income. Thus, we find no substantial question of law to be considered in this appeal with regard to the first issue. Applicability of section 43B - Both the CIT(A) and the Tribunal, finding that there was no evidence with regard to the actual payment of the dues, had rightly set aside the order of the Assessing Officer and remanded the matter with a direction to re-examine the issue and to allow deduction u/s 43B if the amount towards sales tax and excise duty has been paid to the Government before the due date of filing of return, or otherwise, to confirm the addition. Thus, No substantial question of law to be considered wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest paid to the financial institutions. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals), who allowed the appeal holding the issues in favour of the assessee. On appeal by the Revenue, the Income-tax Appellate Tribunal while upholding that the upfront fee paid to the bank for availing of the loan is a revenue expenditure, remanded the matter back to the Assessing Officer with regard to the other two issues. Hence, the Revenue has preferred the present appeal by raising the following substantial questions of law: 1. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the up front fee paid to the bank for availing of loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, have concurrently found that the sum of Rs. 4.4 lakhs, being 1 per cent. of upfront fee, paid by the assessee to the bank, is nothing but the bank charges and the same cannot be construed as a capital expenditure. In our considered, opinion, the law on the point, viz., whether the expenditure incurred by the assessee while availing of loan, assuming it is for purchase of plant and machinery, is a capital expenditure or revenue expenditure, was long back decided by the apex court as well as by several other High Courts, including this court, in favour of the assessee, holding that such expenditure is a revenue expenditure. 5. The Andhra Pradesh High Court in Addl. CIT v. Akkamba Textiles Ltd. [1979] 117 ITR 294, has held that the guarante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al has found that there is no evidence as to the details of actual payments of these dues. It is a settled law that any statutory liability towards sales tax, ESI contributions and provident fund contributions discharged after the close of the previous year but before the due date for filing returns, can be allowed as deduction under section 43B of the Income-tax Act, 1961, only on actual payment of the same, viz., CIT v. Alembic Glass Industries Ltd. [2005] 279 ITR 331 (Guj). 10. It is under these circumstances, both the Commissioner of Income-tax (Appeals) and the Tribunal, finding that there was no evidence with regard to the actual payment of the dues, had rightly set aside the order of the Assessing Officer and remanded the matter with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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