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2013 (1) TMI 398 - HC - Income TaxAddition u/s 43B - Payment of Statutory liability of interest to State Finance Corporation claimed to have been made by book adjustment and not by actual payment - Tribunal deleted the addition - Held that:- Effective payment of interest on the loan taken from Bihar State Financial Corporation by the assessee cannot be denied because the interests were adjusted against the subsidy and the term loan due to assessee. Also that instead of withdrawing the subsidy and the term loans and getting it deposited in the assessee's bank account and again making the payment either by cash or by crossed cheque or bank draft, the payment has been effected by book adjustment, therefore, there is effective payment of the interest on loan to Bihar State Financial Corporation. Hence, disallowance under Section 43B in all the three accounting years were not correct. For making “actual payment” it is always not necessary that one should, if having a credit entry, also have a debit entry, then he should receive the “actual payment” in cash or through cheque or demand draft in his bank account so as to take physical delivery of the currency and then deliver it again to the same creditor who is also debtor of the receiving person. So, “actual payment” means “actual payment” and not actual receipt and delivery of the currency by the two parties transacting when they are creditor and debtor both - thus if the interest is paid not by actually receiving amount from the loan advancing person or institution but is paid out of fund lying in any another account of the assessee with such creditor, then that is the “actual payment” - against revenue.
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