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2017 (3) TMI 1551 - HC - Income TaxExpenditure allowable as deduction as per the explanation to section 37(1) - interest paid to M/s IFCI Ltd. - Held that:- No substantial question of law arises on these two issues. The amount of ₹ 15,25,685/- could not in the circumstances have attracted the mischief under the explanation to Section 37 (1) as it was the interest paid for late repayment of advance to M/s IFCI Ltd, even as far as the amount written off, i.e., ₹ 70,44,023/- is concerned. The Court notes that the sole rationale for disallowance by the AO was that the assessee had stopped its business. The assessee had claimed the said amount as the value of old stock written off. Admit the appeal so far as the following question of law is concerned: - “Whether the ITAT erred in deleting the addition of ₹ 22,90,00,000/- made by the Assessing Officer on account of amount transferred to capital reserve ignoring the fact that the said amount was a revenue receipt in the hands of the assessee and therefore the provision of Section 41 (1) of the Act was applicable?”
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