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2017 (12) TMI 1120 - AT - Income TaxDisallowance of Finance Cost incurred during the year under the consideration u/s 36(1)(iii) - acceptance of the claim in earlier years in proceedings u/s 143(1) - Held that:- Merely because the revenue has accepted the said claim of interest as business expenses in the earlier years in the summary proceedings u/s. 143(1) does not create res-judicata as revenue has never gone into the details of the said claim as the return of income was accepted in summary manner u/s 143(1) without scrutiny being conducted u/s. 143(3) r.w.s. 143(2). Thus, mere acceptance of the claim in earlier years in proceedings u/s 143(1) does not debar Revenue from examining the claim on merits in subsequent years and does not create a bar of res-judicata . We are fully aware that consistency is to be maintained but the claim of interest expenses was never examined by the revenue in any of the earlier years as scrutiny proceedings were not initiated in any of the earlier years since said loans were raised by the assessee. Thus only bald statements are made by the assessee for claiming that the interest has been paid for the business purposes while no such evidences are brought on record by the assessee to prove its contention that the said loans were used for business purposes by the assessee and mandate of Section 36(1)(iii) was complied with. The payments and the return thereof of the said advances are from the sister concerns and in the absence thereof of the evidences on record to substantiate that these were business expenses, we are afraid claim of the assessee to allow interest expenses on bank overdraft as business expenses cannot be accepted and hence the appeal of the assessee is dismissed. - Decided against assessee.
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