Commissioner of Income-tax v. Shri Rama Multi Tech Ltd
[Citation -2017-LL-0406-62]
| Citation | 2017-LL-0406-62 |
|---|---|
| Appellant Name | Commissioner of Income-tax |
| Respondent Name | Shri Rama Multi Tech Ltd. |
| Court | SUPREME COURT |
| Relevant Act | Income-tax |
| Date of Order | 06/04/2017 |
| Assessment Year | 2000-01 |
| Judgment | View Judgment |
| Keyword Tags | payment of interest • revenue expenditure • additional ground • capitalized expenditure • capitalized interest • depreciation claim • interest expenditure |
| Bot Summary: | 4072-4073/2007 COMMISSIONER OF INCOME TAX Appellant(s) VERSUS SHRI. RAMA MULTI TECH LTD. Respondent(s) O R D E R Civil Appeal Nos.4072-4073/2007 The only question on which the leave has been granted by this Court's order dated 31st August, 2007 is as follows: When the assessee had itself capitalized the interest and other expenditure incurred towards creation assets. Whether the CIT(A) and the Tribunal were right and justified in allowing the assessee to claim the said expenditure as revenue expenditure without any just cause Briefly stated, the facts of the present appeals are as follows: The respondent is a public limited company. For the assessment year 2000-01 it had incurred an expenditure of Rs.3,37,84,348/- towards payment of interest on loans taken and other items for setting up the industry. Even though it had capitilized the said amount and claimed depreciation before the Asseessing Authority in appeal, the respondent raised Signature Not Verified additional ground claiming deduction of the aforesaid amount on Digitally signed by SONALI SAUND Date: 2017.04.11 16:52:04 IST Reason: interest paid with some other expenditure on other items connected 1 therewith as revenue expenditure. The Revenue, feeling aggrieved by the said allowance, preferred an appeal before the Income Tax Appellate Tribunal which vide order dated 02.12.2004 upheld the order of the Commissioner of Income Tax insofar as it related to the allowance of the expenditure claimed towards payment of interest and also allowed expenditure on other items connected therewith. In this view of the matter, we are of the considered opinion that the Income Tax Appellate Tribunal was justified in allowing the expenditure of Rs.3,37,84,348/- towards the interest paid on the loans taken and expenditure on other items connected connected herewith for establishment of the unit, while affirming the order 2 of the Commissioner of Income Tax. Learned counsel for the Revenue-appellant submitted that the respondent cannot claim depreciation on the amount of interest which has been allowed as revenue expenditure and therefore, the depreciation referable to such interest expenditure be reversed. |