28. AdvocatesNitesh Housing Developers Pvt Ltd vs. DCIT
[2023] 454 ITR 770 (Kar.)
A.Y. 2011-12
Date of order: 2nd August, 2022
Section 37 of ITA 1961
Business expenditure — Difference between contingent and ascertained expenditure — Capital or revenue expenditure — Premium payment on redemption of shares which has been quantified is revenue expenditure.The assessee was a private limited company engaged in the business of development of real estate and execution of engineering contracts. In September 2009, the assessee entered into a debenture subscription and share purchase agreement. The original agreement was modified under a first addendum agreement dated 15th May, 2010 where under, the option of HDFC to convert debentures to preferential shares at the time of redemption was deleted and the parties agreed that debentures shall be compulsorily converted into preference shares entitling HDFC to post internal rate of return of 25 per cent of the subscription amount. A second addendum agreement dated 12th November, 2012 was entered into between the parties whereunder, HDFC once again resumed the right to exercise the option of converting the debentures to preferential shares. For the A. Y. 2011-12, the assessee filed its original return on 30th September 2011 and revised return on 29th September, 2012. The second addendum agreement was executed on 12th November, 2012, prior to filing the revised returns. The AO held
