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2017 (3) TMI 1252 - HC - Income TaxDisallowance of deduction under Section 36(1)(viia) made under Section 154 - Rectification of mistake - Held that:- In case of assessee, if interest is debited to borrowed account but for any reason interest has not actually realized, account is to be treated as NPA as per the guidelines issued by RBI. In that eventuality, the amount is unrealized, the unrealized interest so taken to income should be reversed by debiting to the P & L Account and crediting to overdue interest reserve account. It was the claim of the assessee that during the year unrealized interest taken to income has been reversed by debiting the P & L Account and crediting to provision for overdue interest account following the guidelines issued by RBI. We find that this issue is highly debatable and it cannot be adjudicated while acting u/s.154 of the Act. The AO should have made disallowance only while framing regular assessment or reassessment, which was made prior to resorting to this rectification. This disallowance cannot be made while acting u/s.154 of the Act reason being this is not a prima facie mistake it is a highly debatable issue. In term of the above, we allow this issue of assessee’s appeal
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