CIT v. Secure Meters Ltd.

321 ITR 611High Court2010#1497 most cited

What is CIT v. Secure Meters Ltd. authority for?

Expenditure incurred on the issuance of debentures, including convertible debentures like Compulsorily Convertible Debentures (CCDs) or Foreign Currency Convertible Bonds (FCCBs), is revenue in nature and thus deductible. This is because a debenture constitutes a loan at the time of its issue, regardless of its future convertibility into equity.

76

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2011 to 2026.

Also referred to as

CIT v. Secure Meters Ltd. · Secure Meters Ltd. · 321 ITR 611 · debenture issuance expenditure · convertible debentures nature · foreign currency convertible bonds · compulsorily convertible debentures · revenue expenditure deduction · loan classification · expenditure on debenture issue · India Cements Ltd. precedent

Also reported as

221 CTR 405

Sections most often in play

Section 115JBSection 14ASection 1961Section 115USection 244ASection 271(1)(c)Section 36(1)(vii)Section 36(1)(viia)

Issues it is cited on

section 50(1)section 80absection 54esection 70(2)section 10(15)section 80msection 10(33)section 14a(1)section 54eclong-term capital assetsection 36(1)(viii)section 111a

Judgments citing CIT v. Secure Meters Ltd.

Addl CIT RG 1(1), Mumbai vs. Hdfc Ltd, Mumbai

ITA 3785/MUM/2009[2004-05]Status: DisposedITAT Mumbai28 Jan 2025AY 2004-05

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Advocate and Shri Ninad Patade, CAFor Respondent: Shri Biswanath Das, CIT DR
Section 1

…into equity at a later date, yet on the date of its issue, it is a loan. Therefore, expenditure incurred thereon is revenue in nature.” Reliance was also placed on the decision of Hon'ble Rajasthan High Court in the case of CIT vs. Secure Meters Ltd., [2010] 321 ITR 611 (Raj) and Hon'ble Delhi Court in the case of CIT vs. Havells India Ltd., [2013] 352 ITR 376 (Del). 18.3. On the given set of facts and judicial precedents discussed above, Revenue could not submit any reason as to why a different view on this issue should be taken as taken by various Hon'ble High Courts. Accordingly, respectfully following the a…

Hdfc Bank Limited (As Successor to Housing Development Finance Corporation Ltd), Mumbai vs. The Addl CIT RG 1(1), Mumbai

ITA 4315/MUM/2007[2002-2003]Status: DisposedITAT Mumbai28 Jan 2025AY 2002-2003

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Advocate and

…o equity at a later date, yet on the date of its issue, it is a loan. Therefore, expenditure incurred thereon is revenue in nature.” Reliance was also placed on the decision of Hon'ble Rajasthan High Court in the case of CIT vs. Secure Meters Ltd., [2010] 321 ITR 611 (Raj) and Hon'ble Delhi Court in the case of CIT vs. Havells India Ltd., [2013] 352 ITR 376 (Del). 18. 3. On the given set of facts and judicial precedents discussed above, Revenue could not submit any reason as to why a different view on this issue should be taken as taken by various Hon'ble High Courts. Accordingly, respectfully following…

DCIT Cir 1(1), Mumbai vs. M/S Housing Developement Finance Corporation Ltd, Mumbai

In the result, appeals of both, assessee and revenue are decided

ITA 4161/MUM/2007[2002-2003]Status: DisposedITAT Mumbai28 Jan 2025AY 2002-2003

Bench: Shri Anikesh Banerjee & Shri Girish Agrawal

For Appellant: Shri Nitesh Joshi, Advocate and
Section 1

…o equity at a later date, yet on the date of its issue, it is a loan. Therefore, expenditure incurred thereon is revenue in nature.” Reliance was also placed on the decision of Hon'ble Rajasthan High Court in the case of CIT vs. Secure Meters Ltd., [2010] 321 ITR 611 (Raj) and Hon'ble Delhi Court in the case of CIT vs. Havells India Ltd., [2013] 352 ITR 376 (Del). 18. 3. On the given set of facts and judicial precedents discussed above, Revenue could not submit any reason as to why a different view on this issue should be taken as taken by various Hon'ble High Courts. Accordingly, respectfully followin…

DCIT, New Delhi vs. M/S Hudco Ltd., New Delhi

In the result, the appeal of the revenue in ITA No

ITA 3904/DEL/2015[2010-11]Status: DisposedITAT Delhi04 Nov 2024AY 2010-11

Bench: Shri M. Balaganesh & Shri Yogesh Kumar U.S.

For Appellant: Shri Gagan Kumar, AdvFor Respondent: Shri Waseem Arshad, CIT DR &
Section 143(3)

…India Corporation (Agencies) Ltd. [2007] 290 ITR 217 (Mad); and (iv) CIT v. First Leasing Co. of India Ltd. [2008] 304 ITR 67 (Mad). In addition to the above judgments, we also have the judgment of the Rajasthan High Court in CIT v. Secure Meters Ltd. [2010] 321 ITR 611 (Raj) against which the special leave petition filed by the Revenue was dismissed. ITA No. 3262/Del/2015 (AY: 2011-12) ITA Nos. 3904 &3905/Del/2015 HUDCO Having regard to the predominant view taken in the above judgments, in which the judgment of the Supreme Court in India Cements Ltd. [1966] 60 ITR 52 (SC) has been noticed, we are inclined to u…

M/S. Housing & Urban Development Corporation Ltd. (Hudco), New Delhi vs. Addl. CIT, New Delhi

In the result, the appeal of the revenue in ITA No

ITA 3261/DEL/2015[2010-11]Status: DisposedITAT Delhi04 Nov 2024AY 2010-11

Bench: Shri M. Balaganesh & Shri Yogesh Kumar U.S.

For Appellant: Shri Gagan Kumar, AdvFor Respondent: Shri Waseem Arshad, CIT DR &
Section 143(3)

…India Corporation (Agencies) Ltd. [2007] 290 ITR 217 (Mad); and (iv) CIT v. First Leasing Co. of India Ltd. [2008] 304 ITR 67 (Mad). In addition to the above judgments, we also have the judgment of the Rajasthan High Court in CIT v. Secure Meters Ltd. [2010] 321 ITR 611 (Raj) against which the special leave petition filed by the Revenue was dismissed. ITA No. 3262/Del/2015 (AY: 2011-12) ITA Nos. 3904 &3905/Del/2015 HUDCO Having regard to the predominant view taken in the above judgments, in which the judgment of the Supreme Court in India Cements Ltd. [1966] 60 ITR 52 (SC) has been noticed, we are inclined to u…

Tata Motors Ltd, Mumbai vs. ACIT 2(3), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 631/MUM/2013[2008-09]Status: DisposedITAT Mumbai05 Feb 2024AY 2008-09

Bench: Shri Vikas Awasthy& Shri S.Rifaur Rahmanआअसं.631/मुं/2013 (िन.व. 2008-09) Tata Motors Limited Bombay House, 24,Homi Mody Street, Hutama Chowk, Mumbai – 400001. Pan: Aaact-2727-Q ...... अपीलाथ"/Appellant बनाम Vs. The Addl. Commissioner Of Income Tax Circle -2(3), Mumbai. Aaykar Bhavan, M.K.Road, Mumbai – 400 020 ....."ितवादी/Respondent अपीलाथ" "ारा/ Appellant By : Shri J.D.Mistry, Sr.Advocate With Shri Nikhil Tiwari,Advocate "ितवादी "ारा/Respondent By : Ms. Vatsala Jha, Cit-Dr & Shri Manoj Kumar Singh, Sr.Ar सुनवाई की ितिथ/ Date Of Hearing : 10/11/2023 घोषणा की ितिथ/ Date Of Pronouncement : 05/02/2024 आदेश/Order Per Vikas Awasthy, Jm:

For Appellant: Shri J.D.Mistry, Sr.Advocate with Shri Nikhil Tiwari,AdvocateFor Respondent: Ms. Vatsala Jha, CIT-DR and Shri Manoj Kumar Singh, Sr.AR
Section 116Section 143(3)Section 92C

…ger fees, Legal and Professional fee, Audit fee, etc. The assessee claimed the aforesaid expenditure as deduction. During assessment proceedings, the assessee pointed that the issue is squarely covered by the decision in the case of CIT vs. Secure Meters Ltd.,321 ITR 611(Raj). The SLP filed by the Department i.e. SLP (C) No. 10548 of 2009 against the said decision was dismissed vide order dated 11/08/2009. The ld.Counsel for the assessee submitted that similar issue was considered by the Tribunal in assessee's own case in Assessment Year 2006-07 in ITA NO.8926/Mum/2010. The Tribunal vide order dated 28/01/2019 al…

DCIT, Circle- 21(1), New Delhi vs. Religare Finvest Ltd., New Delhi

In the result, -Appeal in ITA No

ITA 7553/DEL/2018[2015-16]Status: DisposedITAT Delhi13 Jul 2023AY 2015-16

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

…pany i.e. Religare Enterprises Ltd. is allowable or not. The said issue regarding allowability of interest paid on Compulsory Convertible Debenture is no longer res-integra. 33.1. The Hon’ble Rajasthan High Court in the case of CIT Vs. Secure Meters Ltd. 321 ITR 661 held that the expenses incurred on issue of debentures, whether convertible or not, were deductible as business expenditure under section 37(1) of the IT Act. The Court held that the debenture when issued is a debt, and therefore, whether it is convertible or non-convertible does not militate against the nature of the debenture. The relevant ext…

Religare Finvest Ltd., New Delhi vs. DCIT, Circle- 21(1), New Delhi

In the result, -Appeal in ITA No

ITA 6116/DEL/2018[2015-16]Status: DisposedITAT Delhi13 Jul 2023AY 2015-16

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

…pany i.e. Religare Enterprises Ltd. is allowable or not. The said issue regarding allowability of interest paid on Compulsory Convertible Debenture is no longer res-integra. 33.1. The Hon’ble Rajasthan High Court in the case of CIT Vs. Secure Meters Ltd. 321 ITR 661 held that the expenses incurred on issue of debentures, whether convertible or not, were deductible as business expenditure under section 37(1) of the IT Act. The Court held that the debenture when issued is a debt, and therefore, whether it is convertible or non-convertible does not militate against the nature of the debenture. The relevant ext…

Religare Finvest Ltd., New Delhi vs. DCIT, Circle- 21(1), New Delhi

In the result, -Appeal in ITA No

ITA 547/DEL/2018[2013-14]Status: DisposedITAT Delhi13 Jul 2023AY 2013-14

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

…pany i.e. Religare Enterprises Ltd. is allowable or not. The said issue regarding allowability of interest paid on Compulsory Convertible Debenture is no longer res-integra. 33.1. The Hon’ble Rajasthan High Court in the case of CIT Vs. Secure Meters Ltd. 321 ITR 661 held that the expenses incurred on issue of debentures, whether convertible or not, were deductible as business expenditure under section 37(1) of the IT Act. The Court held that the debenture when issued is a debt, and therefore, whether it is convertible or non-convertible does not militate against the nature of the debenture. The relevant ext…

ACIT (OSD), Circle- 21(1), New Delhi vs. Religare Finvest Ltd., New Delhi

In the result, -Appeal in ITA No

ITA 133/DEL/2018[2014-15]Status: DisposedITAT Delhi13 Jul 2023AY 2014-15

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

…pany i.e. Religare Enterprises Ltd. is allowable or not. The said issue regarding allowability of interest paid on Compulsory Convertible Debenture is no longer res-integra. 33.1. The Hon’ble Rajasthan High Court in the case of CIT Vs. Secure Meters Ltd. 321 ITR 661 held that the expenses incurred on issue of debentures, whether convertible or not, were deductible as business expenditure under section 37(1) of the IT Act. The Court held that the debenture when issued is a debt, and therefore, whether it is convertible or non-convertible does not militate against the nature of the debenture. The relevant ext…

Religare Finvest Ltd., New Delhi vs. ACIT, Circle- 21(1), New Delhi

In the result, -Appeal in ITA No

ITA 7856/DEL/2017[2014-15]Status: DisposedITAT Delhi13 Jul 2023AY 2014-15

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

…pany i.e. Religare Enterprises Ltd. is allowable or not. The said issue regarding allowability of interest paid on Compulsory Convertible Debenture is no longer res-integra. 33.1. The Hon’ble Rajasthan High Court in the case of CIT Vs. Secure Meters Ltd. 321 ITR 661 held that the expenses incurred on issue of debentures, whether convertible or not, were deductible as business expenditure under section 37(1) of the IT Act. The Court held that the debenture when issued is a debt, and therefore, whether it is convertible or non-convertible does not militate against the nature of the debenture. The relevant ext…

ACIT, Circle- 21(1), New Delhi vs. Religare Finvest Ltd., New Delhi

In the result, -Appeal in ITA No

ITA 5202/DEL/2017[2012-13]Status: DisposedITAT Delhi13 Jul 2023AY 2012-13

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

…pany i.e. Religare Enterprises Ltd. is allowable or not. The said issue regarding allowability of interest paid on Compulsory Convertible Debenture is no longer res-integra. 33.1. The Hon’ble Rajasthan High Court in the case of CIT Vs. Secure Meters Ltd. 321 ITR 661 held that the expenses incurred on issue of debentures, whether convertible or not, were deductible as business expenditure under section 37(1) of the IT Act. The Court held that the debenture when issued is a debt, and therefore, whether it is convertible or non-convertible does not militate against the nature of the debenture. The relevant ext…

Religare Finvest Ltd., New Delhi vs. DCIT, Circle- 21(1), New Delhi

In the result, -Appeal in ITA No

ITA 4796/DEL/2017[2012-13]Status: PendingITAT Delhi13 Jul 2023AY 2012-13

Bench: Dr. B. R. R. Kumar & Shri Yogesh Kumar U.S.

Section 14A

…pany i.e. Religare Enterprises Ltd. is allowable or not. The said issue regarding allowability of interest paid on Compulsory Convertible Debenture is no longer res-integra. 33.1. The Hon’ble Rajasthan High Court in the case of CIT Vs. Secure Meters Ltd. 321 ITR 661 held that the expenses incurred on issue of debentures, whether convertible or not, were deductible as business expenditure under section 37(1) of the IT Act. The Court held that the debenture when issued is a debt, and therefore, whether it is convertible or non-convertible does not militate against the nature of the debenture. The relevant ext…

Tata Steel Limited, Mumbai vs. The Principle Commissioner of Income Tax, Mumbai

In the result, both the appeals of the assessee are allowed

ITA 1316/MUM/2022[2012-2013]Status: DisposedITAT Mumbai23 Dec 2022AY 2012-2013
Section 115JSection 143(3)Section 263Section 36(1)(iii)

…terest as revenue expenditure before the ld. AO:- (a) Decision of the Hon‟ble Supreme Court in the case of India Cements Ltd. vs. CIT reported in 60 ITR 52. (b) Decision of the Hon‟ble Rajasthan High Court in the case of CIT vs. Secure Meters Ltd reported in 221 CTR 405 (Raj) (c) Decision of the Hon‟ble Jurisdictional High Court in the case of Premier Automobiles Ltd vs. CIT reported in 80 ITR 415 4.4. Based on the aforesaid factual submissions and judicial precedents, the assessee concluded that the expenses of Rs.24,85,25,000/- incurred on the issue of PNCDs i.e. Hybrid Securities are Revenue in nature allowa…

Tata Steel Limited, Mumbai vs. The Principle Commissioner of Income Tax, Mumbai-2, Mumbai

In the result, both the appeals of the assessee are allowed

ITA 1315/MUM/2022[2011-2012]Status: DisposedITAT Mumbai23 Dec 2022AY 2011-2012
Section 115JSection 143(3)Section 263Section 36(1)(iii)

…terest as revenue expenditure before the ld. AO:- (a) Decision of the Hon‟ble Supreme Court in the case of India Cements Ltd. vs. CIT reported in 60 ITR 52. (b) Decision of the Hon‟ble Rajasthan High Court in the case of CIT vs. Secure Meters Ltd reported in 221 CTR 405 (Raj) (c) Decision of the Hon‟ble Jurisdictional High Court in the case of Premier Automobiles Ltd vs. CIT reported in 80 ITR 415 4.4. Based on the aforesaid factual submissions and judicial precedents, the assessee concluded that the expenses of Rs.24,85,25,000/- incurred on the issue of PNCDs i.e. Hybrid Securities are Revenue in nature allowa…

Asst CIT Cir 2(2)(1), Mumbai vs. Mahindra & Mahindra Ltd, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1739/MUM/2015[2010-11]Status: DisposedITAT Mumbai04 Oct 2022AY 2010-11

Bench: Shri M. Balaganesh () & Smt. Kavitha Rajagopal () Mahindra & Mahindra Limited Vs Asst.Commissioner Of Income-Tax, Corporation Taxation, P.K. Kurne Circle-2(2)(1), Mumbai Chowk, Worli, Mumbai-400 018 Aayakar Bhavan, M.K. Road Pan : Aaacm3025E Mumbai-400 020 Appellant Respondent Asst.Commissioner Of Income-Tax, Vs 020Mahindra & Mahindra Limited Circle-2(2)(1), Mumbai Corporation Taxation, P.K. Kurne Aayakar Bhavan, M.K. Road Chowk, Worli, Mumbai-400 018 Mumbai-400 Pan : Aaacm3025E Appellant Respondent

Section 143(3)Section 144CSection 14ASection 35Section 40Section 80I

…served that the Ld.DRP has relied on the decision of the Tribunal in assessee’s case for A.Y. 2006-07 and 2007-08 wherein the said expenditure was treated as revenue expenditure. The Ld.DRP has also relied on the decision of CIT vs Secure Importers Ltd (2010) 321 ITR 611 (Raj) and also the decision in the case of CIT vs ITC Hotels (2011) 334 ITR 109 (Kar), CIT vs SM Holdings & Finance Pvt Ltd (2003) 264 ITR 370 (Bom). From the above observation it is evident that the claim of priority deduction of premium on convertible debentures was allowable in terms of the propositions laid down in the above cited decisions.…

Mahindra & Mahindra Limited, Mumbai vs. ACIT, Cir -2(2)(1), Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1676/MUM/2015[2010-11]Status: DisposedITAT Mumbai04 Oct 2022AY 2010-11

Bench: Shri M. Balaganesh () & Smt. Kavitha Rajagopal () Mahindra & Mahindra Limited Vs Asst.Commissioner Of Income-Tax, Corporation Taxation, P.K. Kurne Circle-2(2)(1), Mumbai Chowk, Worli, Mumbai-400 018 Aayakar Bhavan, M.K. Road Pan : Aaacm3025E Mumbai-400 020 Appellant Respondent Asst.Commissioner Of Income-Tax, Vs 020Mahindra & Mahindra Limited Circle-2(2)(1), Mumbai Corporation Taxation, P.K. Kurne Aayakar Bhavan, M.K. Road Chowk, Worli, Mumbai-400 018 Mumbai-400 Pan : Aaacm3025E Appellant Respondent

Section 143(3)Section 144CSection 14ASection 35Section 40Section 80I

…served that the Ld.DRP has relied on the decision of the Tribunal in assessee’s case for A.Y. 2006-07 and 2007-08 wherein the said expenditure was treated as revenue expenditure. The Ld.DRP has also relied on the decision of CIT vs Secure Importers Ltd (2010) 321 ITR 611 (Raj) and also the decision in the case of CIT vs ITC Hotels (2011) 334 ITR 109 (Kar), CIT vs SM Holdings & Finance Pvt Ltd (2003) 264 ITR 370 (Bom). From the above observation it is evident that the claim of priority deduction of premium on convertible debentures was allowable in terms of the propositions laid down in the above cited decisions.…

Aarvee Denims & Exports Ltd., Ahmedabad vs. The Dy. Commissioner of Income Tax, Ahmedabad

In the result, appeal of the assessee is partly allowed, while that of the Revenue is dismissed

ITA 993/AHD/2016[2012-13]Status: DisposedITAT Ahmedabad30 Mar 2022AY 2012-13

Bench: S/Shri Pramod M. Jagtap & T.R. Senthil Kumarassessment Year :2012-13 Aarvee Denims & Exports Dcit, Cir.1(1)(1) 191, Shahwadi, Vs Ahmedabad. Nr.Old Octroi Naka Narol-Sarkhej Highway Ahmedabad 382 405. Pan : Aabca 6019 P Assessment Year : 2012-13 Dcit, Cir.1(1)(1) Aarvee Denims & Exports Ahmedabad. Vs Ahmedabad 382 405. Pan : Aabca 6019 P अपीलाथ"/ (Appellant) "" यथ"/(Respondent) Assessee By : Shri D.K. Parikh, Ar Revenue By : Shri V.K. Singh, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 24/02/2022 घोषणा क" तार"ख /Date Of Pronouncement: 30/03/2022 आदेश/O R D E R Per T.R. Senthil Kumar: These Cross Appeals Filed By The Assessee & The Revenue Are Against Order Dated 30.3.2016 Passed By Ld.Commissioner Of Income-Tax (Appeals)-1, Ahmedabad [For Short “Ld.Cit(A)] In Appeal No.Cit(A)-1/Dcit, Cir.1(1)(1)/738/2014-15 Relating To The Assessment Year 2012-13. We Dispose Of Both The Appeals By This Common Order.

For Appellant: Shri D.K. Parikh, ARFor Respondent: Shri V.K. Singh, Sr.DR
Section 143(1)Section 143(2)

…department is not justified. The ld.counsel for the assessee in support of his contentions that expenditure incurred on the liability of loan was allowable expenditure, relied on the decision of Hon’ble Rajasthan High Court in the case of Secure Meters Ltd., 321 ITR 611. 27. We have considered submissions made by the both the parties; perused orders of Revenue authorities and material available on record. Key contention of the assessee is whether FCCB bond issued by the assessee for the purpose of business is a liability, and the expenditure incurred on account of redemption of the same is an allowable expenditu…

The Dy. Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad vs. M/S. Aarvee Denims & Exports Ltd., Ahmedabad

In the result, appeal of the assessee is partly allowed, while that of the Revenue is dismissed

ITA 1553/AHD/2016[2012-13]Status: DisposedITAT Ahmedabad30 Mar 2022AY 2012-13

Bench: S/Shri Pramod M. Jagtap & T.R. Senthil Kumarassessment Year :2012-13 Aarvee Denims & Exports Dcit, Cir.1(1)(1) 191, Shahwadi, Vs Ahmedabad. Nr.Old Octroi Naka Narol-Sarkhej Highway Ahmedabad 382 405. Pan : Aabca 6019 P Assessment Year : 2012-13 Dcit, Cir.1(1)(1) Aarvee Denims & Exports Ahmedabad. Vs Ahmedabad 382 405. Pan : Aabca 6019 P अपीलाथ"/ (Appellant) "" यथ"/(Respondent) Assessee By : Shri D.K. Parikh, Ar Revenue By : Shri V.K. Singh, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 24/02/2022 घोषणा क" तार"ख /Date Of Pronouncement: 30/03/2022 आदेश/O R D E R Per T.R. Senthil Kumar: These Cross Appeals Filed By The Assessee & The Revenue Are Against Order Dated 30.3.2016 Passed By Ld.Commissioner Of Income-Tax (Appeals)-1, Ahmedabad [For Short “Ld.Cit(A)] In Appeal No.Cit(A)-1/Dcit, Cir.1(1)(1)/738/2014-15 Relating To The Assessment Year 2012-13. We Dispose Of Both The Appeals By This Common Order.

For Appellant: Shri D.K. Parikh, ARFor Respondent: Shri V.K. Singh, Sr.DR
Section 143(1)Section 143(2)

…department is not justified. The ld.counsel for the assessee in support of his contentions that expenditure incurred on the liability of loan was allowable expenditure, relied on the decision of Hon’ble Rajasthan High Court in the case of Secure Meters Ltd., 321 ITR 611. 27. We have considered submissions made by the both the parties; perused orders of Revenue authorities and material available on record. Key contention of the assessee is whether FCCB bond issued by the assessee for the purpose of business is a liability, and the expenditure incurred on account of redemption of the same is an allowable expenditu…

Arm Infra & Utilities Private Limited, Mumbai vs. Pr.Commissioner of Income Tax Range-6, Mumbai

In the result, assessee’s appeal is allowed

ITA 2212/MUM/2019[2014-15]Status: DisposedITAT Mumbai12 Nov 2021AY 2014-15

Bench: Shri C.N. Prasad & Shri S. Rifaur Rahman

For Appellant: Shri P.J. Pardiwala a/wFor Respondent: Shri Rajiv Harit
Section 143(2)Section 143(3)Section 263Section 56(2)(viib)

…he aforesaid principle, provisions of section 56(2)(viib) cannot be applied in the year under consideration of issue of debentures. Reliance is placed on the following decisions:  CIT Vs. Havells India Ltd. (352 ITR 376) (Delhi)  CIT Vs. Secure Meters Ltd. (321 ITR 611) (Raj.)  Pr. CIT Vs. Reliance Natural Resource Ltd. (111 taxmann.com 413) (Born.) 2.2.2. The legislature has consciously used the term "shares" in the section as opposed to "securities". Debentures although convertible, are "securities" as defined in Securities Contracts (Regulations) Act, 1956 cited at the time of hearing which makes it clear t…