The case ITA No. 5312/Del/2019 involves the appellant ACIT Special Range-2, New Delhi, contesting an order in favor of the respondent Cleta Real Estate Pvt. Ltd., New Delhi, for the assessment year 2015-16. The appeal was filed on June 10, 2019, against the order passed by the CIT(A)-2, New Delhi.
The Additional Commissioner of Income Tax (ACIT) filed the appeal to contest the allowance of the premium on redemption of debentures on a proportionate basis, arguing that such a claim should only be allowed at the time of actual redemption. This issue arose during the scrutiny of the assessee’s return of income for the year 2015-16.
The appeal was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘B’, New Delhi, with Accountant Member Shri Shamim Yahaya and Judicial Member Shri N.K. Choudhry presiding over the case. The hearing took place on July 7, 2022, and the order was pronounced on July 28, 2022.
The appellant, represented by Shri Laxmi Narayan Aggarwal, Ld. Adv., argued that the premium on redemption of debentures should not be allowed on a proportionate basis. Instead, it should be claimed in the year of actual redemption. The ACIT cited the case of CIT vs. Raymond Ltd. to support this argument.
The respondent, Cleta Real Estate Pvt. Ltd., represented by Ms. Yagya Saini Kakkar, Ld. CIT/DR, argued that the premium on redemption of debentures is a valid business expenditure and should be allowed on a proportionate basis over the period of the debentures. The respondent relied on the Supreme Court judgment in Madras Industrial Investment Corp. Ltd. vs. CIT and other similar cases to support their claim.
The ITAT reviewed the facts of the case, the arguments presented by both parties, and the relevant case laws. The tribunal found that the issue under consideration had already been decided by the co-ordinate bench in the assessee’s own case for the AY 2014-15, where the premium on redemption of debentures was allowed on a proportionate basis.
The tribunal referenced several key judgments, including:
The ITAT upheld the decision of the CIT(A), agreeing that the premium on redemption of debentures should be allowed on a proportionate basis. The tribunal found that the facts of the case and the cited judgments supported the respondent’s claim.
Order pronounced in the open court on July 28, 2022.
Cleta Real Estate Pvt. Ltd. Appeal Dismissal: Premium on Redemption of Debentures for AY 2015-16
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