TMI Blog2022 (11) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 04.04.2019 passed by the Learned Commissioner of Income Tax (Appeals)-2, Hyderabad relating to AY 2016-17. 2. There is a delay of ' 47 ' days in filing of this appeal by the Revenue for which the revenue has filed a condonation application explaining the reasons for such delay. After considering the contents of the condonation application and after hearing the Ld. Counsel for the assessee, the delay in filing of this appeal by the revenue is condoned and the appeal is admitted for adjudication. 3. The grounds raised by the revenue are as under:- 1. Whether on the fats and circumstances of the case, the CIT(A) is correct in law in allowing upfront fee and other charges as revenue expenditure when the same was paid towards loan for acquisition of plant and machinery which is providing enduring benefit to the assessee? 2. Whether on the facts and circumstances of the case, the CIT(A) is correct in law in placing reliance on the decision of the Apex court in civil No. 4072-73 dated 06.04.2017 which is factually distinguishable from the instant case? 4. Facts of the case, in brief, are that the assessee is a company engaged in the business of devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is submitted that in the quoted case law, expenditure involved was in nature of legal fee, registration fees and stamps etc., on obtaining loan. Further issue decided in quoted case was that whether same has been incurred for business purpose or not. Whereas in the present case assessee has paid upfront fee towards the loan taken for the purpose of acquisition of asset and has already taken it to balance sheet. Hence quoted case law is not applicable to the instant case. 3. Further assessee has placed reliance on Hon'ble Supreme Court Judgment in case of Kedarnath Jute Mf. Co Ltd. vs. CIT(Central) Calcutta [082 ITR 0363]. In this regard it is submitted that in the quoted case the issue was whether deduction claimed by assessee on account of sales tax was deductible as business expenses or not. Therefore facts of the quoted case are different from the instant case. 4. Assessee has also relied on Hon'ble Supreme court Judgment in case of DCIT vs. Gujarat Alkalies and Chemicals Ltd. In this regard it is submitted that in the quoted case the issue was allow ability of interest expenses when business was not commenced. Therefore facts of the quoted case are differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand, while supporting the order of the Ld. CIT(A) submitted that the issue stands squarely covered in favour of the assessee by the decision of the Hon'ble Supreme court in the case of CIT vs. Shri Rama Multi Tech Ltd.(supra). Referring to the order of the Ahmedabad Bench of the Tribunal in the case of Shri Rama Multi Tech Ltd. vs. ACIT reported in (2005) 92 TTJ Ahd 568, he drew the attention of the Bench to para 8.4 of the order, where the Tribunal has allowed the financial charges, legal and professional charges and upfront fees by observing as under:- 8.4...............................................As far as financial charges, legal and professional charges and upfront fees are concerned, assessee has mainly relied on the decision in India Cement (supra). In determining the nature of expenditure (revenue or capital) incurred for obtaining loan, it is irrelevant to consider the purpose of loan. The amount spent - stamp duty, lawyer fee, etc., for obtaining loan secured by charge on its fixed assets is as revenue expenditure, because the transaction was entered into directly to facilitate the business of the company and was made on ground of commercial expedienc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital in nature being paid towards loan for acquisition for plant and machinery, which is providing enduring benefit to the assessee. We find the Ld. CIT(A) deleted the addition by following his order for AY 2014-15 as well as the decision of Hon'ble Supreme Court in the case of Shri Rama Multi Tech Ltd. (supra). We do not find any infirmity in the order of the Ld. CIT(A) on this issue. We find the Hon'ble Apex Court in the case of Rama Multi Tech Ld.(supra) while dismissing the appeal filed by the revenue has observed as under:- 3. The respondent is a public limited company. For the assessment year 2000. It had incurred an expenditure of Rs. 3,37,84,348/- towards payment of Interest on loans taken and other Items for setting up the industry. Even though it had capitalized the said amount and claimed depreciation before the Assessing Authority, however, in appeal, the respondent raised additional ground claiming deduction of the aforesaid amount on interest paid with some other expenditure on other items connected therewith as revenue expenditure. 4. The Commissioner of Income Tax (Appeals) vide order dated 5.3.2004 allowed the claim of the respondent-assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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