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2019 (8) TMI 1646 - AT - Income TaxDisallowance u/s 43D - Interest related to OD a/c. with Syndicate Bank, SSI Noida not actually paid by the assessee during the previous year under consideration - CIT(A), after considering the entries in the over-draft account of the assessee in Syndicate Bank found that interest amounts were debited in the over-draft account of the assessee and the assessee also deposited sufficient amount in his account. Therefore, the observation of the Assessing Officer that the said interest was not paid by the assessee but it was debited to the Assessee‟s account by converting into loan is not factually correct - HELD THAT:- On ten occasions when the interest has been debited in the OD account of the assessee, within next few days sufficient amount has been deposited in this account which is an indication that the interest has been paid by the assessee. The details of such credit entries have been given by the AR in his submission mentioned above. The A.O, has concluded that the interest has been converted into loan without payment of the interest on the ground that the balance in the OD account has always remained a debit balance. In this respect the AR has explained that in this OD account initially the limit sanctioned by the bank was ₹ 60,00,000/- but this limit was raised to ₹ 90,00,000/- from January, 2004. It is seen that through out the previous year the balance in this OD account has been less than ₹ 90,00,000/- only. This fact also shows that the outstanding amount in this 01) account at the end of the previous year is on account of the principal loan and not on account of any outstanding interest.Over and above all this, during the appellate proceedings the AR has filed a certificate from the Syndicate Bank in which it is clearly mentioned that the whole of the interest of ₹ 6,84,860/- was recovered by the bank during the previous year itself. No infirmity in the order of the learned CIT(A) to delete the said addition by the Assessing Officer as per Section 43B(e) of the Income tax Act,1961.Hence, ground taken by the Department is rejected.
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