TaxTMI 
TaxTMI 
2019 (2) TMI 1599
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....Appeal No. 231 of 2006, whereby the High Court dismissed the Tax Appeal filed by the appellant. The respondent - assessee filed a return of income showing total loss of Rs. 3,76,70,656 on 31.10.2001. The said return was processed and the statutory notice was issued. The assessment order was passed on 17.03.2004 for the assessment year 2001-02. In the present case, the High Court had admitted the appeal only on the following question of law: "Whether on the facts and circumstances of the case, the Appellate Tribunal was right in law and on facts in deleting the addition made u/s 43B of the Income Tax Act, 1961 on conversion of upaid interest into a funded interest loan treating the same as interest payment?" The Assessing Officer disall....
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....diture of interest is allowable u/s 43 B. It is further added that in case the loan had been disbursed in 2 parts - one to meet the interest outstanding and the balance for financial assistance still the entries in the books of account would have remain the same and the outstanding interest would have been NIL. Having regard to the above facts and also the case laws cited by the appellant's representative, I am inclined to hold that the disallowance made by the Assessing Officer is contrary to the substance of the transaction and the provisions of Section 43B of the Income Tax Act and the same cannot be sustained and therefore directed to be deleted." An appeal was filed before the ITAT against the order of the CIT (Appeals), which was di....
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....resent case. He further submits that the case of Bhagwati Autocast Ltd. (supra) relates to deferment of sales tax under State Government scheme falling under Section 43B(a). We have considered the submissions made by learned counsel for the appellant and perused the record. Section 43B, which is relevant for the present case, is as follows: "43B Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of - (a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or (b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fun....
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....ther loan of Rs. 8 crores which was obtained by the IDBI Bank. The judgment of Delhi High Court relied upon by learned counsel for the appellant refers to Section 43B as well as Explanation 3C and held that Explanation 3C having retrospective effect with effect from 01.04.1989 shall be applicable to the year in question. The Delhi High Court in its judgment has referred to the judgment of Madhya Pradesh High Court in Eicher Motors Limited [supra]. It is useful to refer to paras 11 and 12 of the Judgment: 11. In so concluding, this Court is supported by the decision of the Madhya Pradesh High Court in Eicher Motors Ltd. v. Commissioner of Income Tax, 315 ITR 312 and subsequently, the judgment of the High Court of Telangana and Andhra Prade....
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.... date of judgment, it appears that it was not brought to the notice of learned Judges and hence, the Division Bench proceeded to consider and decide the appeal of the assessee without referring to Explanation 3C appended to Section 43B of the Act. 9. As a matter of fact, from reading of Explanation 3C, in our opinion, the question as raised in the present appeals stands answered without further discussion. This provision was inserted for removal of doubts and it was declared that deduction of any sum, being interest payable under clause (d) of Section 43B of the Act, 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 ....