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2016 (7) TMI 916 - MADRAS HIGH COURT

2016 (7) TMI 916 - MADRAS HIGH COURT - TMI - Addition towards interest waived by the financial institution - Entitlement to deduction u/s 43B - Held that:- Tribunal was right in holding that the assessee is entitled for deduction under Section 43B, with respect to the interest on loan waived by the Bank in one time settlement and thus, answered the first substantial question of law against the revenue. - T.C.A. No. 349 of 2016 - Dated:- 6-6-2016 - S. Manikumar And D. Krishna Kumar, JJ. For the P .....

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to addition of ₹ 6,63,48,983/-, towards interest waived by the financial institution and the second ground was to the addition of ₹ 1,98,92,271/-, being the principal amount waived by the financial institution. 3. As regards first ground of appeal, the Income Tax Appellate Tribunal has confirmed the findings of the Commissioner of Income Tax (Appeals), disallowing the above sum of ₹ 6,63,48,983/-, which was debited in the Profit & Loss Account in the assessment years 1994-9 .....

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pellate Tribunal, Chennai, the Commissioner of Income Tax, Chennai, appellant herein, has filed this appeal, on the following substantial questions of law, (1) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee is entitled for deduction under Section 43B, with respect to the interest on loan waived by the Bank in one time settlement? (2) While dealing with the issue relating to the disallowance of the principal waived by the bank, wheth .....

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ted that the Tribunal has erred in holding that the assessee is entitled for deduction under Section 43B with respect to the interest on loan waived by the bank in one time settlement. He further submitted that the Tribunal ought to have appreciated that the assessee having not actually paid the interest, no deduction under Section 43B is warranted. 7. According to the Assistant Commissioner of Income-Tax, the assessee-company disallowed an expenditure of ₹ 6,63,48,983/-, under Section 43B .....

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rest of ₹ 6,63,48,983/- as deduction, under Section 43B of the Act. The appellant has contended that under Section 43B of the Act, interest would be allowed in the case where the same was paid to the financial institution on or before filing of return of income. Since the entire interest was waived by IDBI Bank, there was no actual payment. Therefore, the claim of the assessee for deduction under Section 43B cannot be allowed. 9. Per contra, it is the case of the assessee that the interest .....

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of ₹ 6,63,48,983/-. Since the interest which was waived by the IDBI Bank was already taken as income for the earlier years under Section 43B of the Act, the same was claimed as deduction under Section 43B of the Act, during the year under consideration. 10. Having regard to the rival submissions and the material on record, the Tribunal has passed the following orders, Admittedly, the Assessing Officer disallowed the interest to the extent of ₹ 6,63,48,983/- under Section 43B of the A .....

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