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2019 (7) TMI 84 - ITAT COCHINSlump sale u/s 50B - AO assessed sale of the industrial units with the land, building, plant and equipments as going concerns to another company - assessee claim capital gain as sale of depreciable assets u/s 50 - HELD THAT:- As decided in own case [2010 (10) TMI 673 - KERALA HIGH COURT] sale of the undertaking is a slump sale within the meaning of Section 2(42C) assessable under Section 50B and assessee also rightly styled the transaction as such as "slump sale" in the sale documents and even got the Auditor's report prepared and filed along with return in terms of Section 50B(3). - assessment was rightly made by the Officer u/s 50B treating the transaction as "slump sale". Addition u/s.43B being interest accrued on loans from Banks/Financial Institutions - sum not been paid before the due date of filing the return - HELD THAT:- As per the provisions of section 43B(d) and (e) of the Act, the assessee has to pay the interest on any loan or borrowings in accordance with the terms and conditions of agreement governing such loan or borrowings when it was borrowed from the public financial institution or a State financial corporation or a State industrial investment corporation or a scheduled bank. However, in the present case, the Ld. AR has fairly conceded that the assessee has not paid interest on loan or borrowings made from such institutions and shown as income in the subsequent year on its waiver. According to the Ld. AR, it cannot be added in the assessment year under consideration. In our opinion, offering of income on waiver in the subsequent assessment year cannot be a reason to allow non-payment of interest as deduction when it was not paid in accordance with the provisions of section 43B. Hence, we are in full agreement with the finding of the CIT(A) and the same is confirmed. Thus, this ground of appeal of the assessee is dismissed. Disallowance of part of interest claimed - diversion of funds to sister concerns - HELD THAT:- In view of the judgment of the Jurisdictional High Court in the case of V.I. Baby & Co. [2001 (10) TMI 58 - KERALA HIGH COURT] CIT(A) had confirmed the disallowance of the interest made by the AO. However, we make it clear that AO has to compute interest on diversion of funds to sister concerns on outstanding balances on day to day basis. With this observation, we remit this issue to the file of the AO for re-computation of interest. This ground of appeal of the assessee is partly allowed for statistical purposes. Re-instatement of foreign exchange loans procured for working capital requirements - capital or revenue - HELD THAT:- If the transactions undertaken are on account of revenue items, the gain is clearly taxable and so the loss also is clearly allowable. The assessee except making bald assertion that the transactions were undertaken on account of capital items no evidence was brought on record to establish that the foreign currency transactions were undertaken on capital items. The AO also had failed to undertake this exercise. The Hon'ble Supreme Court in the case of CIT Vs. Woodward Governor India Pvt. Ltd. [2009 (4) TMI 4 - SUPREME COURT] had clearly held that the actual payment was not a condition precedent for making adjustment in respect of foreign currency transactions as the end of the closing year. We are therefore, unable to concur or agree with the view of the CIT(A), that liability could arise only when the contract would have matured, as such a stand is totally divorced from the accounting principles and is in variance with the principle upheld by the Apex Court in the case Woodward Governor India (P.) Ltd. (supra) - we restore the matter to the file of AO with the direction that to re-do the assessment keeping in view the principles enunciated above
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