TMI Blog2022 (4) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... H COURT] distinguished Vijay Bank (supra) and held that broken period interest should be treated as revenue expenditure and not capital expenditure. An SLP against this Judgment in American Express International Banking Corporation (supra) was also dismissed by the Supreme Court. We note that during the assessment proceedings, Petitioner was called upon to, by a letter dated 16th September, 2010 from DCIT, to file complete details of broken period interest as on 31 st March, 2008 and also explain as to why the same should not be taken into income and taxed accordingly. Petitioner filed its response by a letter dated 11th October, 2010 and informed DCIT that Petitioner has been consistently treating the broken period interest as revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircular No.665/1993 issued by CBDT also states that broken period interest is not allowable on investments as the same constitutes capital expenditure. In AY 2010-11, disallowance is made in respect of broken period interest in the case of the assessee bank as the same is capital expenditure. It is observed that no disallowance is made in AY 2008-09 with respect to broken period interest in the case of the assessee. xxxxxxxxx 2] Therefore, according to Respondent No.1, the broken period interest should be treated as capital expenditure and not revenue expenditure as held by the Apex Court in Vijaya Bank Ltd. vs. Addl.CIT (1991) 187 ITR 541 (SC) and circular No.665/1993 issued by CBDT. Since such disallowance is made in as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and taxed accordingly. Petitioner filed its response by a letter dated 11th October, 2010 and informed DCIT that Petitioner has been consistently treating the broken period interest as revenue item. In earlier years, the same was disallowed by the Assessing Officer and allowed by the Commissioner of Income Tax (Appeals) and in view of the Supreme Court s decision in favour of Bank by dismissing the Special Leave Petition filed by department against Judgment of this Court in the case of Americal Express (Supra), the Assessing Officer has allowed Bank s claim in the assessment for the assessment year 2004-05, 2005-06, 2006-07 and 2007-08. Therefore, this issue was subject for consideration during the assessment proceedings. It is true that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of the assessee and against the department. Therefore, we fail to understand as to why revenue is pressing ahead with these Appeals which are pending as stated by Mr. Suresh Kumar. We would urge the concerned departmental head in the Ministry of Finance to consider and take a call whether it is worth keeping such Appeals alive. 8] Petition is therefore allowed in terms of prayer clause (a), which reads as under : (a) This Hon ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction, order or writ including a writ in the nature of Certiorari calling for the records of the case and after satisfying itself as to the legality thereof, quash and set aside the notice dated 4.12.2013 (E ..... X X X X Extracts X X X X X X X X Extracts X X X X
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