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2015 (4) TMI 267 - ANDHRA PRADESH HIGH COURTConversion of interest into a term loan - whether the Tribunal was justified in holding that conversion of interest into a term loan can be taken as a deemed payment for the purpose of Section 43B of the Act? - Held that:- As 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 to have been actually paid. Thus, the doubt stands removed in view of Explanation 3C. This provision was considered by the Madhya Pradesh High Court in Eicher Motors Limited Vs. Commissioner of Income Tax (1996 (8) TMI 517 - MADHYA PRADESH HIGH COURT) to hold that in view of the Explanation 3C appended to Section 43B with retrospective effect from 01.04.1989, conversion of interest amount into loan would not be deemed to be regarded as actually paid amount within the meaning of Section 43B of the Act. It is not in dispute that the assessment years with which we are concerned in the present appeals are covered by Explanation 3C, which was inserted by the Finance Act, 2006 with retrospective effect from 01.04.1989. In this view of the matter, the appeals filed by the Revenue deserve to be allowed. - Decided in favour of the Revenue
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