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2014 (2) TMI 841 - ITAT MUMBAIDisallowance of interest Expenditure - Loan confirmatory letters not furnished - Interest debited in the work–in–progress - Revenue was of the view that the assessee could not prove the genuineness of the loan and, accordingly, the interest has been disallowed and had been deducted from work–in–progress – Held that:- Once the loan has been received in the earlier assessment year which are duly reflected in the Balance Sheet filed along with the return of income and the same has not been disturbed by the Department, then such a loan taken in the earlier years cannot be held to be non–genuine in this year - If the interest has been paid / payable in the earlier years, as well as in the present assessment year, then there cannot be a question of doubting the genuineness of the loan in this year, only for the purpose of disallowing the interest in this year. Since, no addition has been made on account of unexplained credit of loan in the earlier year under section 68, then no disallowance can be made out of interest in the present year - the assessee has duly deducted TDS on such payment of interest and has been deposited with the Government account, the details of which are already there in the record – thus, disallowance of interest by way of reducing the work–in–progress as on 31st March 2007, cannot be sustained – Decided in favour of Assessee.
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