TMI Blog2017 (2) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... the same has been filed within the time and is otherwise in order. Even when application was originally rejected, the said circular allows a fresh application to consider. Like-wise, Circular No. 73 dt. 17-01-1972 empowers the officer that in all cases where a valid application under clause B of sub-section 2 of Section 154 had been filed by assessee within the statutory limit but was not disposed-off within the time limit specified under sub-section 7 of Section 154, it may be disposedoff by that authority even after expiry of the statutory time limit on merits and in accordance with law. Keeping the above circulars in view, we are of the opinion that assessee’s claim is an allowable claim, if the claim for rectification was made as per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The issue in this appeal is with reference to claim of funded interest paid under the provisions of Section 43B, invoking Explanation 3C. Assessee filed return of income for AY. 2004-05 on 01-11-2004 by declaring total income of NIL after setting-off the un-absorbed brought forward depreciation. A revised return was filed on 20-10-2005 by declaring total income of NIL after offering an interest of ₹ 21,670/- on income tax refund and again settingoff of un-absorbed brought forward depreciation. Subsequently, assessee filed a petition u/s. 154 stated to be on 18-02-2009 acknowledged by the Addl. CIT, Range on 25-02-2009 seeking allowance of an amount of ₹ 28,10,000/- being interest portion of a loan which was funded and paid du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was adjourned to 17-11-2017. Assessee has filed detailed submissions on the issue and the grounds itself are very elaborate. After hearing the arguments of the Ld. DR, the appeal is disposed-off considering the submissions and grounds of assessee. 5. As seen from the orders of the AO and CIT(A), there is no dispute that assessee was entitled to claim the amount as funded interest u/s 43B read with Explanation C on payment basis. At the time of filing the original return as well as revised return, there was a dispute whether funded interest itself can be treated as payment . This was clarified by the Finance Act, 2006 w.e.f. 01-04-1989 by insertion of Explanation 3C. The Explanation is as under: Section 43B . [Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15.02.2004 7,02,500 185110 14.02.2004 7,02,500 Paid by SKG Since the appellant paid the interest before the due date of filing of return of income (i.e. 01.11.2004), he could have claimed the interest at the time of filing the return itself, however he did not do so. After a gap of six years, the assessee moved an application before Assessing Officer on 04.03.2010 requesting for allowing interest paid of ₹ 28,10,000 on the ground that Explanation 3C to sec.43B was introduced the Finance Act 2006 with retrospective effect from 01.04.1989 clarifying that funded interest can be claimed on payment basis . 6. Assessee di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e limit specified under sub-section 7 of Section 154, it may be disposedoff by that authority even after expiry of the statutory time limit on merits and in accordance with law. Keeping the above circulars in view, we are of the opinion that assessee s claim is an allowable claim, if the claim for rectification was made as per the time limits prescribed in Section 154. 8. However, it is to be noted that AO made a reference to company s letter dt. 04-03-2010 in the order u/s. 154. The order also does not mention when the return was processed u/s. 143(1). Moreover, the enclosures to the appeal indicate that application u/s. 154 has been filed on 25-02-2009. If this date is taken, the application may be well within the statutory period. How ..... X X X X Extracts X X X X X X X X Extracts X X X X
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