Expense on payment of guarantee commission is revenue expenditure

The only question is whether the guarantee commission paid to the bankers for securing timely repayment of credit facility and loan from financial institutions for the purpose of machinery and equipments is revenue expenditure.

The Division Bench of this Court in case of Kinetic Engineering Ltd (supra) was dealing precisely with the said issue, wherein, in the said case, the Assessee had to pay guarantee commission for securing timely repayment of credit facility obtained for the purpose of machinery

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