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TMI Blog2017 (2) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 Rs. 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 Rs. 28,10,000/- being interest portion of a loan which was funded and paid during the year. Assessee relied on the Explanation 3C to Section 43B inserted by Finance Act, 2006 w.e.f. 01-04-1989. However, AO v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing 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 ................ [Explanation 3C.-For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (d) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount earlier, but claimed the amount after the amendment was made retrospectively. AO gives a finding that assessee was eligible for deduction. Ld. CIT(A) also gives a finding that assessee was eligible for deduction. However, AO and CIT(A) rejected on technical grounds. AO rejected the petition stating that the claim was not made in the revised return. Ld. CIT(A) however, rejected that there is no mistake apparent from record on the facts of the case. 7. We are unable to understand why and how this does not fall under the category of mistake apparent from record. Assessee has indeed made a claim after amendment of the Act. Consequently, to that extent, one has to consider that the claim was properly made. The Board Circular No. 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO nor the CIT(A) has examined whether the application was made within the statutory period of four years from the date of order sought to be amended, as per Section 154(7) of the Act. The CIT(A) stated that application was made after six years. How the period was counted was not specified. The starting point should be the order, which is sought to be amended. Since there is no clarity on this point, we direct the AO to examine the record and if the application is made within the statutory period then, assessee's claim should be allowed u/s 154 of the Act. For this purpose, AO is directed to verify the dates of the order(s) and the date on which assessee filed rectification petition u/s. 154. Subject to verification as stated above, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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