Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 575 - AT - Income TaxDisallowance of interest expense holding it as prior period expense - Assessee submitted the fact that actual credit and payment of this interest amount and TDS relating thereto occurred in A.Y. 2013-14 i.e. the assessment year under consideration - HELD THAT:- In the given facts and circumstances where the assessee has not claimed interest expenses in the preceding years and the loan creditor IBFSL has also not recognized the corresponding interest income in the preceding years, it will not be justified to disallow the claim of interest expense in the hands of the assessee when it remained contingent in the preceding years and which devolved and crystallized only during the relevant year under consideration before us, owing to realization of its dues by IBFSL in one shot from the assessee. It is not a case as if the Revenue has been deprived of any tax. In fact, by not claiming interest expense in the earlier years, assessee has reported higher amounts of total income. Hence, there is no loss of tax to the Revenue. We are of the considered view that Ld. CIT(A) was not justified in sustaining the disallowance of interest expense claimed by the assessee in his profit and loss account when the documentary evidence to substantiate the claim were placed on record. We accordingly set aside the finding given by the Ld. CIT(A). Consequently, addition made by the Ld. AO by making a disallowance as arrears interest is deleted. - Decided in favour of assessee.
|