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The substantial questions of law framed by a bench of this court are answered against the revenue.

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Sec.37 of Income Tax Act, 1961 - Business Expenditure – The assessee filed the return of income declaring the loss in respect of the A.Y. 2003-04. The assessee claimed a sum of Rs. 211.57 Crores restructuring package as deduction and further claimed a sum of Rs. 1,89,40,966/- as interest written off. The AO disallowed the claim for restructuring package as deduction and it was further held that if interest component was written off then the question of allowing the deduction of the principal as an expenditure did not arise. The CIT(A) partly allowed the appeal. Being aggrieved, the revenue preferred an appeal. Tribunal admitted the appeal on the substantial questions as; Whether the finding of the appellate authorities that a sum of Rs. 211,57,21,643/- conversion of interest payable to financial institutions, banks into 10% redeemable preference shares would amount to allowable revenue expenditure when the same is not actually paid, is perverse and arbitrary as payments have not been made and contrary to explanation 3C to Section 43B of the Act?”. ITAT dismissed the appeal of the revenue holding that ”the substantial question of law is covered by decisions of this court as well as Delhi High Court in case of ‘KIRLOSKAR ELECTRIC CO. LTD VS. CIT’, 228 ITR 674 (KAR), ‘COMMISSIONER OF INCOME TAX V. RATHI GRAPHICS TECHNOLOGIES LTD’, 378 ITR 107 (DELHI) and answered against the revenue“.—CIT vs. JSW STEEL LIMITED.[2020] 26 ITCD Online 041 (KARN)