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| The Tax Publishers2019 TaxPub(DT) 1986 (Ker-HC) INCOME TAX ACT, 1961
Section 37(1)
Premium payable on redemption of debentures was an expenditure allowable as revenue but it had to be spread over the period of debentures for the purposes of allowing it as deduction.
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Business expenditure - Premium payable on redemption of debentures - Year of allowability -
Assessee claimed loss on account of issuance of debentures at premium in the year of maturity on the ground that it was a liability which would happen only on maturity of debentures. Held: Liability incurred by assessee to discharge debentures at premium was certain in the year of issuance and was already undertaken quantum of which was also certain and known. By virtue of this, extent of loss suffered had to be applied in respect of each year covered by debentures, to an appropriate exent.
Applied:Madras Industrial Company v. CIT (1997) 225 ITR 802 (SC) : 1997 TaxPub(DT) 1209 (SC).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 1999-2000
INCOME TAX ACT, 1961
Section 36(1)(va)
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