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2022 (5) TMI 173 - GUJARAT HIGH COURTDisallowance u/s 43B - issuance of shares as against the outstanding liability of interest of the assessee company for the year under consideration - HELD THAT:- The Supreme Court in the case of M.M. Aqua Technologies Ltd. [2021 (8) TMI 520 - SUPREME COURT] had an occasion to deal with Section 43B more particularly, Explanation – 3C of the Act and found that Explanation – 3C was squarely attracted against the outstanding interest had not actually being paid, but instead a new credit entry of loan appeared, bringing the case within the express language of Explanation – 3C. The Court further held that what is required to be considered is the extinguishment of liability to pay the interest in the facts of each case. We agree with the view taken by the CIT(A) as confirmed by the ITAT that it is not a case of conversion of outstanding interest into the loan so that the same could be allowed only on the actual payment, more particularly, when as acknowledge by ICICI Ltd. the defaulted interest stands extinguished having realized the fully paid up shares. Consequently, there is no further outstanding interest to be paid by the assessee company in future as it stands extinguished in the year under consideration Section 43B is hereby held to be attracted in the facts of the case. In view of the above, concurrent findings recorded by the CIT(Appeals) and by the ITAT, the question of law raised by the department does not deserve any further consideration. The said question also being no more res-integra, it could not be said that the present appeal involves any question much less substantial question of law.
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