TMI Blog2009 (12) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure was made for securing the use of money for a certain period and it was irrelevant to consider the object with which the loan was obtained and therefore, the amount spent was not in the nature of capital expenditure and was laid out or expended wholly and exclusively for the purpose of the assessee's business and was therefore allowable as a deduction - the very statute provides that such a set off can be done till the provision was amended with effect from 1.4.2002 – setoff was allowed – decided in favor of assessee - 2409 to 2412 of 2008 & 43 TO 45 OF 2008 - - - Dated:- 7-12-2009 - Coram: The Honourable Mr.Justice K.Raviraja Pandian, And The Honourable Mr.Justice M.M.Sundresh APPEALS under Section 260A of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read as follows : For the relevant assessment years, the assessee company claimed the benefit of carry over of the losses of the earlier years comprising of business loss, unabsorbed depreciation and unabsorbed business allowances. The Assessing Officer, inter alia, disallowed the expenditure on standby assets, deposit mobilization expenses, investment allowance on standby assets and set off of unabsorbed depreciation against house property income. 3. Aggrieved by the assessment orders, the assessee preferred appeals to the Commissioner of Income Tax (Appeals), who allowed the appeals based on the orders of the earlier years. The Revenue carried the matter on appeal to the Income Tax Appellate Tribunal. The Tribunal also, relying on i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at the time the loan is negotiated to be taken into consideration or the purpose for which it is actually used? ......the purpose for which the new loan was required was irrelevant to the consideration of the question whether the expenditure for obtaining the loan was revenue expenditure or capital expenditure. To summarise this part of the case, we are of the opinion that :(a) the loan obtained is not an asset or advantage of an enduring nature; (b) that the expenditure was made for securing the use of money for a certain period; and (c) that it is irrelevant to consider the object with which the loan was obtained.' Observing so, the Supreme Court held that the act of borrowing money was incidental to the carrying on of business, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess commences or the previous year in which expansion of the industrial undertaking is completed, etc. In the present case, on the facts, the Tribunal has found that the object of the debenture issue was to meet the working capital requirement of the assessee and therefore, the expenditure was considered to be a revenue expenditure.' In CIT Vs. Investment Trust of India Limited (264 ITR 506), this Court held that the expenditure on advertisements in newspapers inviting fixed deposits from the public is allowable in the words: 'In view of the provisions contained in Section 58A of the Companies Act, 1956, the assessee company had to advertise the notice calling for deposits and if there was any breach, the assessee was liable to be proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and held in the affirmative in favour of the assessee. The Tribunal has followed only the dictum laid down by the Supreme Court. In addition to the above, the very statute provides that such a set off can be done till the provision was amended with effect from 1.4.2002. 7. All the questions of law, which have been formulated in these appeals, have already been answered in favour of the assessee, which require no determination at this point of time by entertaining these appeals. 8. Accordingly, these appeals are dismissed. Consequently, all connected pending TCMPs are also dismissed. No costs. (K.R.P.J.) (M.M.S.J.) 07.12.2009 Index: Yes Internet: Yes K.RAVIRAJA PANDIAN, J AND M.M.SUN DRE SH, J - - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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