2006 (7) TMI 201

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....cts and circumstances of the case, the Tribunal erred in law in not holding the appellant entitled to deduction of the funded interest amounting to Rs. 2,89,61,025 under section 43B of the Income-tax Act ('the Act')? 2. Whether, on the facts and circumstances of the case, the Tribunal erred in law in not holding that by funding of interest whereby the outstanding interest got converted into principal amount of loan, the outstanding interest was actually paid in terms of section 43B of the Act? 3. Whether, on the facts and circumstances of the case, the Tribunal erred in law in not holding that the outstanding interest liability having been funded on October 25, 1989, the actual payment thereof took place before December 31, 1989, the due ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....erted into a loan or borrowing shall not be deemed to have been actually paid.' (b) after Explanation 3C as so inserted, the following Explanation shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 1997, namely:- Explanation 3D - For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (e) 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 advance shall not be deemed to have been actually paid'." 4. In view of Explanation 3C, the question referred to this court stands answered in favour of the Revenue and against the assessee. In....