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2016 (7) TMI 1093
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....he Act"). 2. The brief facts are that the assessee claimed deduction to the tune of Rs. 2,84,71,384/-under Section 43B of the Act, in the computation of income. The interest was paid to the financial institutions during the assessment year in question by issuing non-convertible debentures to such institutions. The Assessing Officer (AO) had rejected the assessee's claim for deduction, holding that the issue of debentures for the interest payable does not amount to actual payment of interest and conditions of Section 43 B of the Act were, therefore, not satisfied. The Commissioner of Income Tax (CIT), who allowed the appeal, accepted the assessee's contentions. The Income Tax Appellate Tribunal (ITAT) rejected the revenue's appeal- it, th....
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....Ltd. v. DCIT, (2001) 255 ITR 491, where it was held that mere postponement of the liability to pay interest does not amount to discharge, whether actual or constructive and, therefore, the conversion of the outstanding interest into a term loan liability, though with the consent of the lender, cannot be considered as a constructive discharge of the interest liability. 4. This court- in the judgment under review- negatived the assessee's contentions. It firstly noted that by virtue of Explanation 3C to Section 43-B (d) there was no room left for doubt that actual payment of amounts "payable" was essential, in view of the clear terms ("any interest referred to in that clause which has been converted into a loan or borrowing shall not be de....
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....t reliance on Sunrise Associates vs Govt. of NCT of Delhi & Ors. 2006 (5) SCC 603, where it was observed as follows: "Consequently an actionable claim is movable property and 'goods' in the wider sense of the term but a sale of an actionable claim would not be subject to the sales tax laws. Distinct elements are deducible from the definition of 'actionable claim' in Section 3 of the Transfer of Property Act. An actionable claim is of course as its nomenclature suggests, only a claim. A claim might connote a demand, but in the context of the definition it is a right, albeit an incorporeal one. Every claim is not an actionable claim. It must be a claim either to a debt or to a beneficial interest in movable property. The be....
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....itions to call for delivery of goods mentioned in a contract is an actionable claim and assignable under Section 130. (See Jaffer Meher Ali Vs. Budge-Budge Jute Mills Co.(1906) 33 Cal.702). There may also be assignments of an actionable claim dehors Section 130 (See Bharat Nidhi Ltd. Vs. Takhatmat (1969) 1 SCR 595). Negotiable Instruments, another species of actionable claim, are transferable under the Negotiable Instruments Act 1881. Transferability is therefore not the point of distinction between actionable claims and other goods which can be sold. The distinction lies in the definition of actionable claim. Therefore if a claim to the beneficial interest in movable property not in the vendee's possession is transferred, it is not a s....
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...., this court erroneously answered the following question: "Whether the funding of the interest amount by way of a term loan amounts to actual payment as contemplated by Section 43B of the Income-tax Act, 1961?" 7. The question which has to be decided is whether the decision of this court, which held that because of Explanation 3C to Section 43-B, any adjustment other than actual payment does not qualify for deduction under Section 43-B. As is evident from the discussion, the assessee's review is premised on two major arguments, i.e. that the judgments of the Supreme Court have categorically held that debentures (issued in favour of the bank, in this case to discharge interest liability) amounted to payment and that such debentures, be....
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.... Section 43-B. This court is of opinion that there is no question of any error in the judgment under review. The clear purport of the statute- i.e. Section 43-B (d) is that any amount payable towards interest liability would qualify for deduction; however Explanation 3C acts to insist on a rider: "Explanation 3C.- For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause(d) of this section, shall be allowed if such interest has been actually paid and any interest referred to in that clause which has been converted into a loan or borrowing shall not be deemed to have been actually paid." Quite possibly the assessee's arguments would have been convincing and the court might have be....