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2022 (4) TMI 493 - AT - Income TaxAddition on account of interest paid on overdraft - As per AO interest expenditure was not included by the assessee in its closing stock of Work-in-Progress (WIP) of its projects - HELD THAT:- When the assessee had recovered the entire amount of interest that was charged by the bank on the amount which was advanced by it to its sister concern, therefore, as stated by the ld. AR, and rightly so, the claim for deduction of interest expenditure stood nullified in the backdrop of the corresponding interest income that was received from the sister concern. We find that a similar alternate disallowance of interest expenditure that was made by the Assessing Officer in the case of the assessee for the immediately preceding year i.e. A.Y. 2012-13 [2016 (11) TMI 1713 - ITAT PANAJI] was vacated by the Tribunal, and the said order had thereafter been approved by the Hon’ble High Court of Bombay. Backed by our aforesaid observations we find no merit in the aforesaid grievance of the revenue that the CIT(Appeals) had erred in not sustaining the alternate disallowance - The Ground of appeal raised by the revenue is dismissed in terms of our aforesaid observations. Trading liability which had ceased within the meaning of section 41(1) - HELD THAT:- Ceased liability can be added u/s. 41(1) of the Act only in the year, when some benefit in respect of trading liability i.e., by way of remission or cessation thereof, had been obtained by the assessee. As such, the addition of a trading liability which had ceased can only be made in the previous year, in which, some benefit in respect of such trading liability by way of remission or cessation thereof, had been obtained by the assessee. In our considered view, the Assessing Officer in the case before us had though pointed out that there is a cessation of liability but had failed to place on record any material which would irrefutably evidence that such cessation had taken place during the year in question i.e. A.Y. 2013-14, and as a result thereof, the consequential benefit by way of remission or cessation thereof had been obtained by the assessee during the said year itself. We, thus, in terms of our aforesaid observations not being able to persuade ourselves to the summarily dubbing of the aforesaid amount as the assessee’s ceased liability for the year under consideration vacate the same - Decided in favour of assessee.
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