TMI Blog2019 (8) TMI 1646X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest has been debited in the OD account of the assessee, within next few days sufficient amount has been deposited in this account which is an indication that the interest has been paid by the assessee. The details of such credit entries have been given by the AR in his submission mentioned above. The A.O, has concluded that the interest has been converted into loan without payment of the interest on the ground that the balance in the OD account has always remained a debit balance. In this respect the AR has explained that in this OD account initially the limit sanctioned by the bank was ₹ 60,00,000/- but this limit was raised to ₹ 90,00,000/- from January, 2004. It is seen that through out the previous year the balance in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee did not file any certificate for payment of the interest before the due date of filing of the return for the assessment year under consideration. 2. None appeared on behalf of the assessee. 3. Considering the facts of the case, we decided to dispose of the appeal by considering the submissions of the learned DR and the orders of the authorities below 4. The learned DR in his submissions relied on the order of the Assessing Officer. 5. We observe that the Assessing Officer has disallowed the interest of ₹ 6,84,860 claimed by the assessee on the ground that the said interest was not paid by the assessee in the Assessment Year under consideration and accordingly disallowed the same under clause (e) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount. Hence, the observation of the Ld. A. O. that interest has been debited in the account but not actually paid is not maintainable. 5. The balance in the account as on 31.03.2004 for ₹ 89,91,664.53 was well within the sanction limit of ₹ 90 Lakhs. In case OD limit of ₹ 90 Lakhs is considered to be a separate loan account, there was a credit balance of ₹ 8,335/47 in the account with Syndicate Bank. We give herein below the details of credit in the said account after the debit entry relating to interest disallowed in the assessment. Date Debit Date Credit 30.05.2003 55,478.00 02.06.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication that the interest has been paid by the assessee. The details of such credit entries have been given by the AR in his submission mentioned above. The A.O, has concluded that the interest has been converted into loan without payment of the interest on the ground that the balance in the OD account has always remained a debit balance. In this respect the AR has explained that in this OD account initially the limit sanctioned by the bank was ₹ 60,00,000/- but this limit was raised to ₹ 90,00,000/- from January, 2004. It is seen that through out the previous year the balance in this OD account has been less than ₹ 90,00,000/- only. This fact also shows that the outstanding amount in this 01) account at the end of the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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