respect of capitalization of
professional fees capitalized of certain expenses, FCCB Premium and
FCCB Issue Expenses,"
5. "On the facts ... erred in deleting the addition by way of disallowing FCCB
Premium."
6. "On the facts and in the circumstances of the case
That the learned CIT(A) erred in upholding the disallowance
towards FCCB expenditure of Rs. 7,30,66,667/- which is not
correct ... loss of Rs. 21,92,00,000/- on
foreign currency convertible bonds (FCCB) and therefore
the company has restated the bonds at the exchange rates
Aamer Pacific P. Ltd., .. ` 39,08,79,350
` 39,30,02,950
FCCB Issue Expenses ... were invoked and that amount was disallowed.
11. The FCCB issue expenses were incurred in connection with issue of
Foreign Currency Convertible Bonds
submitted that as regards difference in exchange on Foreign
Currency Convertible Bonds (FCCB) of ` 27,40,189, the same has to be
treated as revenue ... expenditure because the premium payable on FCCB has
been allowed as revenue expenditure by the Tribunal and, therefore, it is a
kind of an additional
action of the
AO/TPO in disallowance of premium on redemption of FCCB. For this
assessee has raised following ground No. 5 as under ... Ground 5- Premium on Redemption of
FCCB
5.1 The Ld. DRP/AO erred in law and
facts in disallowing of premium on
redemption of FCCB
section 35D on issue of
Foreign Currency Convertible Bonds (in short "FCCB"). The
said sum was disallowed ... reason that FCCB
are not on account of any public issue and only qualified
institutional investors are offered the bonds. The A.O./DRP
have
seventh disputed issue is in regard to
disallowance of depreciation claim on FCCB premium,
where the assessee has debited in the earlier year an
amount ... depreciation. The AO was not satisfied
with the claim as the FCCB premium was capitalized
under the pre-operative expenditure and subsequently
capitalized under
under normal provisions in view of the following
additions/disallowances: -
i) FCCB issue expenses `28,58,28,246/-
ii) Legal and professional fees ... deduction of withholding tax on interest
payments on FCCB ` 3,35,70,044/-
2.2 Aggrieved by the order of the assessment
incurred
by the assessee towards the issue of Foreign Currency Convertible Bonds
(FCCB). The assessee had issued FCCB of USD 100 million on 28.4.2004 with ... incurred expenditure of Rs.11,85,26,700/- for
the issue of FCCB. The AO asked the assessee to explain as to why these
expenses
amount
claimed as deduction pertaining to raising of Foreign Currency
Convertible Bonds (FCCB) as revenue expenditure were not
allowable and required to be capitalized because ... FCCB was
raised with the purpose of being required for working capital
whereas the same was used in a manner contrary to permitted
