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2014 (8) TMI 164 - AT - Income TaxAssessment of accrued interest on investment – Held that:- It was advanced towards share application money and the promissory notes were obtained only as a safety measure since company has not allotted shares to the assessee - if the amount advanced by the assessee was converted to share application money in March 2008 and ultimately shares were allotted to the assessee, then the amount cannot be treated as unsecured loan post conversion to share application money, consequentially there cannot be any accrued interest on amount - the AO is directed to verify the books of account of M/s Amareswara Agrotech Pvt. Ltd. to ascertain the date on which unsecured loan given by the assessee was converted to share application money and accordingly assess the interest income till such FY – thus, the matter is remitted back to the AO for verification – Decided in favour of Assessee. Claim of deduction on interest on borrowed capital u/s 24 – Held that:- The claim of deduction towards interest payment was disallowed primarily for the reason that the assessee could not substantiate such claim by producing documentary evidence/proof - there is no reason why it should be disallowed in the subsequent year – thus, the matter is remitted back to the AO for fresh adjudication - assessee is also directed to furnish documentary evidence, to substantiate her claim - If on verification assessee’s claim is found to be correct then deduction claimed has to be allowed – Decided in favour of Assessee.
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