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2015 (11) TMI 6 - AT - Income TaxRectification of mistake - Relief of liability towards interest expenditure claimed by the appellant - deductibility of interest u/s. 57(iii) - Held that:- We have given our careful consideration to the matter. In our view, no claim for interest survives. This is not for the reason that no interest was contemplated or agreed upon at the time the debt came into existence or during the relevant years, as noted by the tribunal earlier. This is also not for the reason that no interest was agreed upon for subsequently, i.e., during and up to the relevant year, both of which are reasons, by itself sufficient to deny the assessee’s claim for interest on ground of no liability in its respect accruing or arising. The special court holds the sum/s payable by A to B as being liable to be adjusted against the liability of B, or of A, or even of C for that matter, in-as-much as A, B, C (and others) form one group, so that these can be utilized for discharge of their liabilities to third parties. In other words, A is equally liable for the liability of B, and so on. The liabilities, accordingly, only represent inter se balances held in account, not leading to any substantive right or liability per se. Where, we wonder, then, is the question of interest arising on such inter-personal balances? We have in fact already observed, and which is in keeping with the observations made in the impugned order, of there being nothing on record to show of accrual of any liability qua interest, which we confirm. We, accordingly, find little merit in the assessee’s claim for interest. That it (interest) may have been paid by one notified party to another, for any subsequent year, shall not in any manner alter our decision. This order, to the extent in conflict, supersedes our order u/s. 254(1) dated 10.03.2014, and is to be read in conjunction therewith.
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