TMI Blog2001 (8) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... wise perverse?" In compliance with our direction the aforesaid question has been referred for our opinion. The assessee is a public limited company mainly carrying on the business of running hotels popularly known as "Oberoi Hotels". The assessment year is 1982-83. Assessment was completed on March 17, 1986, on a total income of Rs.3,77,12,470. The Commissioner of Income-tax on a scrutiny of the assessment records found that the Assessing Officer has wrongly allowed Rs.67,18,758 as revenue expenditure while completing the assessment for the assessment year 1982-83. Therefore, he issued a show-cause notice to the assessee why the assessment order should not be set aside and the deduction of amount of Rs.67,18,758 should not be withdraw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erm loan, can be allowed as revenue expenses. Heard learned counsel for the parties and liberty was given to the parties to file a written submission if they so desired. Learned counsel for the assessee has submitted written submissions but no written submissions are filed by learned counsel for the Revenue. The facts are not in dispute that the assessee has incurred expenses of Rs.67,18,758 on the issue of 7,50,000 debentures of Rs.100 each for a total value of Rs.7.50 crores and that amount is repaid as under: "(a) 20 per cent. at the end of three years from the date of allotment of debentures by way of issue of equity shares. (b) 20 per cent. each thereafter at the end of the 8th, 9th, 10th and 11th years from the date of allot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured for certain period the expenditure is revenue expenditure within the meaning of section 10(2), clause (xv) of the Act as held by the apex court in the case of India Cements Ltd. [1966] 60 ITR 52. Section 35D has been introduced to give benefit to assessees in cases of capital expenses. When the capital expenses cannot be allowed as deduction in computing the income, but under section 35D capital expenses can be allowed as deduction in ten year span, i.e., 1/10 in each year. But how a deduction, which is allowable otherwise as revenue expenses, can be denied after the insertion of section 35D, learned counsel failed to explain. The Board has also clarified this issue in Circular No. 56, dated March 19, 1971. The Board clarified ..... X X X X Extracts X X X X X X X X Extracts X X X X
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