Case Law Details
Sacmi Engineering India P. Ltd. Vs DCIT (ITAT Ahmedabad)
main issue for our consideration is that whether the expenditure on conversion of debenture bond into equity share capital is revenue or capital expenditure. The claim of the assessee is that since capital base has been increased due to conversion of debenture for meeting working capital of the assessee-company, the expenditure for such conversion ought to be allowed as revenue expenditure. As observed by the ld.CIT(A), facts of the case of the assessee clearly indicate that portion of convertible debenture was converted into equity shares and assessee company had got enduring benefits therefrom and therefore, the expenditure incurred by the assessee on conversion of convertible debentures into equity shares has to be treated as capital expenditure. For which, the ld.CIT(A) relied upon the judgment of Hon’ble Supreme Court in the case of Brooke Bond India Ltd., 225 ITR 798. Thus, we are of the view that the ld.Revenue authorities have taken a correct view of the matter while disallowing claim of the assessee.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
PER RAJPAL YADAV, VICE-PRESIDENT: Assessee is in appeal before the Tribunal against order of the ld. CIT(A)-8, Ahmedabad dated 20.12.2018 passed for the Asstt.Year 2014-15.
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