Vijay Bishnoi, J. - (1.) THIS Income Tax Appeal has been preferred under section 260 -A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act of 1961') against the order dated 12.10.2007 passed by the Income Tax Tribunal, Jodhpur Bench, Jodhpur (hereinafter referred to as 'the Tribunal').
(2.) THE Tribunal vide impugned order has upheld the order dated 26.06.2006 passed by the learned Commissioner of Income Tax (Appeals), Udaipur (hereinafter referred to as 'the CIT(A)') and deleted disallowance of expenses of Rs. 38,01,629/ - out of total premium of Rs. 47,69,517/ - paid on account of reducing interest rate of IDBI loan. Initially, the assessing authority had disallowed the expenses of Rs. 38,01,629/ - to the assessee paid on account of reducing interest rate of IDBI loan. Brief facts, necessary for disposal of this I.T. Appeal, are that during the course of assessment proceedings for the year 2003 -2004, the assessing authority held that an amount of Rs. 38,01,629/ - paid by the assessee as upfront payment in the assessment year 2003 -2004 is not allowable while treating as revenue expenditure for the assessment year in question. The CIT(A) in an appeal preferred on behalf of the assessee held that the disallowance of claim of Rs. 38,01,629/ - is not justified and the same is required to be treated as revenue expenditure for the assessment year 2003 -2004. The Tribunal has also upheld the findings of the CIT(A) vide order dated 12.10.2007 and being aggrieved with this, the instant appeal has been preferred.
(3.) THIS Court vide order dated 07.08.2009, while admitting the appeal, framed following substantial question of law: "Whether on the facts and in the circumstances of the case, the learned Tribunal was right in upholding the deduction of Rs. 47,69,517/ - being the lump sum payment of 50% of total interest amount as revenue expenditure in the relevant assessment year only notwithstanding the fact that the amount was including the payment of interest for subsequent years -;