K.L. Manjunath, J.

1. The Revenue has come up in this appeal under Section 260A of the Income Tax Act 1961, challenging the legality and correctness of the order passed by the Income Tax Appellate Tribunal, Bangalore, in ITA No. 53/Bang/1997 dated 19. 11.2003.

2. The appeal was admitted on the following substantial questions of law:

1) Whether Tribunal was correct in holding that expenses incurred by the assessee for issue of convertible debentures relating to part-B of the debenture as adverted to in the course of its order that as debentures get converted into shares after 18 months only the same should foe treated as a revenue expense and not as a capital expense during the current assessment year.

3. The assessee fixed its return for the assessment year 1393-94. During the course of scrutiny, the Assessing officer noticed that the assessee had claimed debenture issue expenditure of Rs. 21,35,500/-. The said claim was disallowed by the Assessing officer by his order dt.8.2.1996. Aggrieved by the same, the Assessee preferred an appeal before the commissioner of Income Tax,(Appeals) and a relief was given to the assessee in respect of non-convertible debentures treating it as a revenue expenditure and disallowed the claim in regard to convertible portion of debenture. Aggrieved by the same, the Assessee filed an appeal before the Income Tax Appellate Tribunal, Bangalore Bench, which appeal came to be allowed treating the expenditure incurred for convertible debentures as a revenue expenditure and not as a capital expenditure. This order is called in question in this appeal

4. We have heard the learned Counsel for the revenue and the learned Senior counsel, Sri. Rupesh Jain, for the respondent assessee.

5. After hearing the learned Counsel for the parties, we have come across a Judgment of the Rajasthan High Court in CIT Udaipur v. Secure Meters Limited in Income Tax Appeal No. 8/2007. Jodhpur Bench of High Court judicature of Rajasthan considering the various aspects has come to the conclusion that even if the debenture were to be converted into share at a later date, the expenditure incurred on such convertible debenture has to be treated as a revenue expenditure. The order of the Jodhpur Bench was taken up before the Honble Supreme Court in Special Leave Appeal CC 10548/2009. The Honble Apex Court has dismissed the SLP.

6. Therefore, we are of the view that the point raised in this appeal has been decided in view of the dismissal of the SLP by the Honble Apex Court.

7. Following the aforesaid decision, we are of the view that even if the debenture has to be converted into a share at a later date, the expenditure so incurred for collection of debenture has to be treated as revenue expenditure.

8. Accordingly, we do not see any merits in this appeal. The substantial question of law framed has to be answered against the revenue.

9. Accordingly, the appeal is dismissed.