In Brief
Rama Multi Tech Ltd claimed deduction of Rs. 3,37,84,348/- towards interest and ancillary expenditures incurred for establishing an industrial unit, despite having previously capitalised the same amount and claimed depreciation. The Income Tax Appellate Tribunal allowed the deduction, following precedent that such expenditures can qualify as revenue expenditure. The Supreme Court affirmed this view but imposed a crucial safeguard: any depreciation previously claimed on the amount now allowed as revenue expenditure must be reversed to prevent double benefit. The Revenue's appeals were dismissed with this qualification.
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