Tribunal reverses disallowance of interest payment due to oversight, directs deletion of addition

The Tribunal allowed the appeal of the assessee regarding the disallowance of interest paid to creditors under section 40(a)(ia) of the Income Tax Act for the assessment year 2006-07. The Tribunal found that the delay in submitting Form 15G was due to oversight, but the forms were available before assessment. As a result, the Tribunal reversed the decision of the CIT(A) and directed the deletion of the addition, concluding that there was no reason to disallow the interest.

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Issues involved: Appeal against disallowance of interest paid to creditors u/s 40(a)(ia) of the IT Act for the assessment year 2006-07.

Summary:
1. The AO disallowed interest paid to creditors under s. 40(a)(ia) of the IT Act.
2. The CIT(A) upheld the AO's decision.
3. Assessee argued that depositors had no taxable income and submitted Form 15G before the payment date.
4. Assessee's delay in submitting Form 15G was due to oversight, but forms were available before assessment.
5. Departmental Representative supported lower authorities' orders.
6. Tribunal found no reason to disallow interest as forms were available before assessment, reversed CIT(A)'s order, and directed deletion of the addition.
7. The appeal of the assessee was allowed.

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