Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (6) TMI 1063 - AT - Income TaxDeduction u/s 43B - disallowance of prior period interest expenses as payable to public financial institutions/ Governmental bodies - HELD THAT:- We are not in agreement with the Commissioner of Income Tax (Appeals) as prior period interest was paid by the assessee to the Government of Tamil Nadu and Government of Tamil Nadu is not a public financial institution / governmental body which comes under the provisions of section 43B of the Act. The co-ordinate Bench of this Tribunal in the case of The Kallakurichi Co-op. Sugar Mills Ltd. (supra) observed that any amount payable to a Government is not hit by section 43B of the Act. Thus, the observation of the Commissioner of Income Tax (Appeals) that these interest payments made to Government of Tamil Nadu are hit by the provisions of section 43B of the Act is not correct and reversed. However, we agree with the view of the Commissioner of Income Tax (Appeals) that prior period interest liability crystallized on 28.3.2008 when the payment was made to the Government of Tamil Nadu during the financial year 2007-08 relevant to the assessment year 2008- 09 and is allowable in the assessment year 2008-09. Addition u/s 43B of the Act being interest paid to Government of Tamil Nadu - AO observing that the said amount was only a provision for payment and as per the provisions of section 43B of the Act any claim of interest payments has to be allowed only on actual payment even though the loan is from public sector financing bodies, therefore Assessing Officer disallowed the said interest and added back to the total income - HELD THAT:- As held that interest paid to Government of Tamil Nadu is not hit by the provisions of section 43B of the Act. In the circumstances, we are of the considered view that this matter should go back to the Assessing Officer to verify as to whether assessee paid the interest of ₹ 183.90 lakhs to Government of Tamil Nadu or to any other financial institution or it is only a provision made. Needless to say if this amount is paid to Government of Tamil Nadu, the provisions of section 43B of the Act have no application to such payments. The Assessing Officer shall examine the issue afresh in accordance with law after providing adequate opportunity to the assessee.
|