COMMISSIONER OF INCOME TAX DEL vs. M/S DCM LTD.

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 1084/2006 . COMMISSIONER OF INCOME TAX DEL ..... Appellant Through Ms. P.L. Bansal versus M/S DCM LTD. ..... Respondent Through Mr. Santosh Agarwal . CORAM: HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE MR. JUSTICE VIPIN SANGHI . O R D E R 22.08.2006 The Revenue is aggrieved by an order dated 16th December, 2005 passed by the Income Tax Appellate Tribunal, Delhi Bench ?F? in ITA No.3610/Del/02 relevant for the assessment year 1994-95. The Revenue has raised the following three questions of law for our consideration: a) Whether the ITAT was correct in law in remanding the issue back to the Assessing Officer for deciding afresh the issue regarding addition of Rs.1,11,61,491/- in valuation of closing stock of raw material in DCM Data Products Unit? . b) Whether the ITAT was correct in law in deleting the addition of Rs.1,90,01,701/- made by the Assessing Office by disallowing expenditure incurred by the assessee in connection with issue of partly convertible debentures? . c) Whether expenditure incurred by the assessee on issue of partly convertible debenture is a capital expenditure or of revenue nature? . . . In so far as question (a) is concerned, we have already dealt with this issue in ITA No.930/2005 and ITA No.1056/2006. Under the circumstances, we are of the view that question (a) raised by the Revenue is not a substantial question of law which would require our consideration. In respect of questions (b) and (c), we are of the view that a substantial question does arise and therefore we admit this appeal in respect thereof and reformulate the substantial questions for our consideration: . ?Whether the Income Tax Appellate Tribunal was correct in law in allowing the entire expenditure of Rs. 1,90,01,701/- incurred by the Assessee in connection with the issue of partly convertible debentures as a revenue expenditure?? . Paper books be filed in accordance with the High Court Rules. . MADAN B. LOKUR, J . . . VIPIN SANGHI, J AUGUST 22, 2006 Upreti . . . . . .