JUDGMENT

Mrs. Sujata V. Manohar, J.-The appellant is a public limited company. The present appeal filed by it pertains to the accounting year ending June 30, 1967 relevant to the assessment year 1968-69.

2. On December 10, 1966 a public issue of the debentures of the appellant-company was made. The total value of the debentures was Rs. 1.5 crores repayable with interest at the rate of 5-3/4% per annum. The debentures were issued at a discount of 2%, redeemable after 12 years. The issue price of a debenture of Rs. 100/- was Rs. 98/-. The total discount on the issue of Rs. 1.5 crores amounted to Rs. 3 lakhs. For the assessment year 1968-69 the appellant-company wrote off Rs. 12,500/- out of the total discount of Rs. 3 lakhs being the proportionate amount of discount for the period of six months ending with June 30, 1967, taking into account the period of 12 years which was the period of redemption and dividing the discount of Rs. 3 lakhs over the period of 12 years.

3. Earlier the appellant had issued debentures at a discount of 1% redeemable after 10 years. The discount relating to these debentures was being written off periodically. For the assessment year 1968-69 the appellant-company wrote off a discount of Rs. 10,000/-. Thus, in the balance-sheet as of 30th of June, 1967, on the Liabilities side the debentures issued during the relevant accounting year were shown at the figure of Rs. 1.50 crores. On the Assets side, the discount account of these debentures was as follows :-

"Discount allowed on issue of Bonds

(to the extent not written off)

Upto last balance sheet Rs. 22,500

Additions during the year Rs. 3,00,000

Rs. 3,22,500

Less :

Amount written of Rs. 22,500

Rs. 3,00,000

The discount of Rs. 22,500/- represented Rs. 12,500/- written off out of the discount of Rs. 3,00,000/- and Rs. 10,000/- written off as discount on the previous issue.

4. The Income-tax officer by his assessment order dated January 31, 1969 disallowed the claim of the appellant for deduction of Rs. 22,500/- on the ground that discount on bonds and debentures was not allowable as an expenditure. On appeal, the Appellate Assistant Commissioner by his order dated July 4, 1969 held that the discount allowed at the time of the issue of debentures was to be treated as a part of the expenditure for such issue. He upheld the claim for deduction of Rs. 12,500/- but rejected the claim as regards Rs. 10,000/- on the ground that it related to discount on debentures issued in an earlier year and hence it did not pertain to the relevant previous year.

5. The assessee then preferred an appeal before the Appellate Tribunal. The assessee contended, inter alia, that (1) The Appellate Assistant Commissioner had erred in sustaining the disallowance of Rs. 10,000/- on the ground that it related to an earlier year and (2) The Appellate Assistant Commissioner having held that discount allowed at the time of issue of debentures was to be treated as part of the expenditure incurred for such issue, should have further allowed a sum of Rs. 2,87,000/- being balance amount of the total discount of Rs. 3,00,000/- relating to the issue of debentures of Rs. 1.5 crores. Before the Tribunal the department contended that the appellant-company had, for the first time, made a new claim before the Tribunal for deduction of Rs. 2,87,500/- and the Tribunal had no jurisdiction to examine this claim. This objection was rejected by the Tribunal. The Tribunal held that the expenditure of Rs. 3,00,000/- was incurred during the relevant previous year although it was proportionately written off over a period of 12 years. The expenditure of Rs. 3,00,000/- was allowable as expenditure incurred for the purpose of business. But the mere fact that for accountancy purposes this amount was spread over 12 years and only Rs. 12,500/- was written off, being the proportionate amount for 6 months ending with June 30, 1967, cannot make any difference. Therefore