This Tax Alert summarizes a recent ruling of the Supreme Court (SC), in the case of Taparia Tools Ltd. (Taxpayer), wherein the issue was whether a taxpayer can be permitted full deduction under the provisions of the Indian Tax Laws (ITL) for upfront payment of debenture interest, though such payment has been amortised over the tenure of the debenture in the books of account. The SC, based on the facts, held that since the Taxpayer had claimed deduction for the full amount of upfront interest payment, the same should be allowed in the year of payment and should not be spread over the term of the debentures. The SC reiterated that there is no concept of deferred revenue expenditure under the ITL. Furthermore, the SC also ruled that the treatment given in the books of account is not an estoppel against the statute to claim deduction.
Thursday, 26 March 2015
Supreme Court rules on year of deductibility of debenture interest paid upfront
This Tax Alert summarizes a recent ruling of the Supreme Court (SC), in the case of Taparia Tools Ltd. (Taxpayer), wherein the issue was whether a taxpayer can be permitted full deduction under the provisions of the Indian Tax Laws (ITL) for upfront payment of debenture interest, though such payment has been amortised over the tenure of the debenture in the books of account. The SC, based on the facts, held that since the Taxpayer had claimed deduction for the full amount of upfront interest payment, the same should be allowed in the year of payment and should not be spread over the term of the debentures. The SC reiterated that there is no concept of deferred revenue expenditure under the ITL. Furthermore, the SC also ruled that the treatment given in the books of account is not an estoppel against the statute to claim deduction.
Subscribe to:
Post Comments (Atom)
Share sale by Passive Shareholder taxable as Long-Term Capital Gains and not Business Income irrespective of non-compete clause in the SPA
As per Income Tax Laws, any sum received or receivable in cash or kind under an agreement for not carrying business or profession is treat...
-
A new website launched for TDS related matters www.tdscpc.gov.in TRACES – T DS R econciliation A nalysis and C orrection E nabling S yste...
-
Introduction: ADR’S, GDR’S: These are commonly known as Depository Receipts (‘DR’), a negotiable security issued outside India by a deposi...
-
In the case of "Maya Gopinathan vs Anoop SB 2024 INSC 334," the Hon'ble Supreme Court provided insightful guidance on the de...
-
Particulars in Part 1 and Part 2 of Step-2 of registration form are required to be exactly the same as reported in the TDS statement. Plea...
-
In Standard Castings Private Limited v. ITO , the Hon’ble ITAT Delhi allowed the assessee’s appeal and set aside a demand that had continu...
-
Introduction Employee welfare is a cornerstone of corporate responsibility, and gratuity forms a critical part of the social security benefi...
-
The Approving Panel under General Anti-Avoidance Rules (GAAR), in a landmark direction, has characterized the demerger of Digital, Media a...
-
An eminent concern within the GST framework pertains to the entitlement of Input Tax Credit (ITC) concerning expenditures associated with In...
-
Key Notes: Transfer pricing relates to the pricing of transactions (such as transfer of goods, services, intangibles and funds) that t...
-
If you are an NRI or foreign national and you have a taxable income in India then buck up and get a PAN card. Getting PAN Card in India by...
No comments:
Post a Comment