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2016 (9) TMI 708 - ITAT MUMBAIDisallowance of Interest - Accrual of interest liability - year of assessment - Held that:- Any liability for expenses can be claimed in the year of crystallization. In the instant case assessee had had not claimed interest expenditure in earlier years, however to settle the matter he entered into MOU with creditors to pay the same. The liability to pay interest for earlier year was crystallized during this year only. In view of all the contradictions pointed out by CIT(A), we restore the matter back to the file of Assessing Officer to examine the correctness of the interest so claimed with reference to actual amount due to earlier year. Assessing Officer is also directed to verify if assessee had actually made payment of interest in the subsequent year. If the Assessing Officer found that even after making provision in MOU, assessee has not made payment in subsequent year, because more that 7-8 years have been passed after the execution of the MOU, the Assessing Officer will be at the liberty to disallow the same. We directed accordingly. Penalty u/s.271(1)(c) - Held that:- The assessee claimed the interest to the tune of ₹ 53,76,200/- which was disallowed on the ground of that earlier to the relevant assessment year no provision of interest was retained in the account books and when the assessee claimed in the relevant assessment year then the same includes the interest payable to M/s. Sangam India Ltd. for the earlier year also i.e. 2000-01 to onwards. The MOU dated 29.07.2003 no doubt speaks the liability of the assessee to pay the interest but the figure did not match with the explanation of assessee in view of the letter dated 30.06.2011 as discussed above. The MOU never acted upon no payment was made the cheques issued by the assessee were bounced and the claim of the creditors went up to the Hon’ble Bombay High court as well as before the recovery Tribunal. Therefore, in the said circumstances it is a clear case of furnishing the inaccurate particulars just to evade the tax liability, therefore, in the said circumstances the law relied by the representative of the assessee has to no use.
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