2015 (10) TMI 1595

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.... 2. In this appeal, although assessee has raised multiple Grounds of appeal but the solitary grievance is with regard to a disallowance of Rs. 38,98,474/-, which represented interest expenditure paid to M/s. Hindalco Industries Ltd. The appellant is a company, engaged in the business of production of Winding Wire and Enamelled Wire. Assessee purchases its principal raw material, namely, copper from M/s Hindalco Industries Ltd. The aforesaid amount reflected interest charged by Hindalco Industries Ltd, on account of delayed payment of dues by assessee. The Assessing Officer noted that the interest expenditure related to the period ending on 31.03.2009, which corresponded to immediately preceding assessment year of 2009-10 and, therefore, the....

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....in the preceding year and, therefore, it was a prior period expenditure, thus the lower authorities have rightly disallowed the impugned expenditure. 5. We have carefully considered the rival submissions. Factually speaking, there is considerable strength in the plea set-up by the assessee that liability in respect of the impugned expenditure of Rs. 38,98,474/- has crystallized only on the receipt of debit notes from Hindalco Industries Ltd, in the current assessment year. No doubt, interest has been charged by Hindalco Industries Ltd, in respect of purchases effected by the assessee in the earlier year, but the liability to pay interest has indeed crystallized only when the debit notes for the same were raised by Hindalco Industries Ltd, ....