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Exp on issue of debenture

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(Querist)
03 September 2012 CAN ANY ONE TELL ME WHETHER EXPENSES ON ISSUE OF DEBENTURE TO BE TREATED AS CAPITAL EXP OR REVENUE EXP IN BOOKS OF ACCOUNT
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CA Ayush Agarwal

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CA Ayush Agarwal (Expert)
03 September 2012 In Some Cases by Judiciary, It Was Held That It Should be Treated as revenue Expenses Only.

Apart From This, As Per My Perception, You Can Show It as Cost of Project, & Can Claim Exp u/s 35D & Claim Deduction 1/5th Every Year.
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Pankaj Gupta

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Pankaj Gupta (Expert)
03 September 2012 Debenture is not a part of capital of a company. It is a debt. So the expenses relating to it are of revenue nature and thus fully allowed.This has also been allowed in case of India Cements Ltd. Vs CIT (SC).
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SANYAM ARORA

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SANYAM ARORA (Expert)
03 September 2012 Agreed in some cases it has been taken as revenue and in some as capital.
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