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2018 (9) TMI 2016 - AT - Income TaxDisallowance u/s 43B(e) read with explanation 3D - AO made disallowance of interest on OD account maintained by the assessee on the ground that every month, the interest amount was debited to the OD account which only resulted in increasing the amount of loan/advance due to the bank from the assessee - CIT(A) deleted the disallowance while relying on various judicial decisions and relying on the order of his predecessors in assessee’s own case for AY 2011-11 by holding that the assessee had made payment of interest with respect to the OD /CC account and therefore was not covered by the provision of section 43B(e) r.w explantation 3D - HELD THAT:- We find that the identical ground has already been decided for AY 2011-12in assessee’s own case [2016 (12) TMI 1839 - ITAT MUMBAI] department declined to grant the benefit of deduction on interest paid primarily on the plea that the amount has not been actually paid and transfer of amount from one account to another account cannot be treated as paid. However, the Tribunal repelled the said plea by interpreting Section 43B of the Act and held that overdraft/cash credit accounts are not similar to loan accounts. The Tribunal further observed that the interest amount has been actually paid by the assessee through Overdraft/Cash Credit account and, therefore, set aside the disallowance made under Section 43B of the Act. A bare reading of Explanations 3C and 3D to Section 43B of the Act provides an answer to the problem by making it clear that where interest amount has not been converted into loan or borrowing (or) loan or advance, as the case may be, there is no question of denying the benefit of deduction. In the case on hand, the interest amount has been actually paid by the assessee through Overdraft/Cash Credit account and the same has not been converted into loan or borrowing (or) loan or advance, as the case may be. These appeals are dismissed by answering the question of law against the Revenue and in favour of the assessee
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