1. - Heard learned counsel for the parties.

2. This appeal under Section 260A of the IT Act, 1961 (for short "the Act") is directed against the order of Tribunal, Jodhpur Bench, Jodhpur, dated 28th January, 2003 at the instance of CIT. It relates to asst. yr. 1992-93. The issue relates to claim of the assessee regarding deduction of liability to pay premium on non-convertible debentures issued by it during the assessment year in question.

3. The facts are that the assessee is a limited company, which is registered under the Indian Companies Act, 1956, It has issued non-convertible debentures of Rs. 3 crores in favour of LIC and State Bank of India mutual fund on premium. As per the term of issue of debentures, the assessee was to redeem those debentures at a premium of 5 per cent of the face value of the debentures in three equal installments at the end of 7th, 8th and 9th year by paying Rs. 35 per year. The payment of Rs. 105 was to be made against the issue amount of Rs. 100 per debenture. Thus, against receipt of Rs. 3 crores of finance the assessee agreed to Rs. 3,15,00,000. The assessee maintains its books of account as per mercantile system. Though, no entries have bee