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TMI Blog2018 (9) TMI 2016X X X X Extracts X X X X X X X X Extracts X X X X ..... interest payable shall be allowed only if such interest has been actually paid and any interest referred in the said clause which gets further converted into loan or advance shall not be deemed to have been actually paid. 2) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that the assessee did not have positive balance in his cash credit account on a single date prior to the filing of return. 3) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the closing balance of Rs. 3.06 crores as on 31.03.2012 in the OD account being less than the OD limit of Rs. 6 crores, indicates that the same is on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plantation 3D of the I.T. Act. It was also pointed out that the identical ground has already been decided on merits in favour of assessee by the order of the Coordinate Bench of ITAT in ITA No. 2230/Mum/15 for AY 2011-12 in assessee's own case. 5. On the other hand, Ld. DR relied upon the orders passed by AO. 6. We have heard both the parties and we have also perused the material placed on record as well as the orders passed by revenue authorities. We find that the identical ground has already been decided by the Coordinate Bench of Hon'ble ITAT in ITA No. 2230/Mum/15 for AY 2011-12in assessee's own case. The operative portion of the order of Hon'ble ITAT contained in para no. 3 to 6, which is reproduced below:- 3. At the outset, ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the deposits were shown at Rs. 39,56,40,419/- and having closing balance of Rs. 2,80,24,975/-. The payments in respect of term loan were also paid. The ld. CIT(A) while considering the appeal of the assessee concluded as under: "7. I have carefully considered the facts of the ea e, the findings of the AO, the submissions of the AR of the appellant and material placed on record. As per the bank statement, it is seen that during the year under consideration, the bank had provided the following amount of interest against CC Account with UBI: Date Interest debited Rs. 30.04.2010 94,573 31.05.2010 84,967 30.06.2010 95,701 31.07.2010 2,92,934 31.08.2010 2,22,761 30.09.2010 2,46,311 31.10.2010 2,73,797 30.11.2010 3,36,301 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the same is on account of principle loan and not on account of interest. Considering the facts of the case in entirety, above discussion and respectfully following the above decisions quoted, the addition made by the AO, on this account is hereby, deleted. This ground of appeal is allowed accordingly." 5. The Hon'ble Madras High Court in CIT vs. Prakash Foods & Feed Mills P. Ltd. (supra) while deciding the similar ground held as under: "3. We have heard the learned Standing Counsel appearing for the Revenue and perused the orders passed by the Tribunal and the authorities below. 4. Before adverting to the merits of the case, it would be apposite to refer to the relevant portion of Section 43B of the Act, which reads as under: S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imarily on the plea that the amount has not been actually paid and transfer of amount from one account to another account cannot be treated as paid. However, the Tribunal repelled the said plea by interpreting Section 43B of the Act and held that overdraft/cash credit accounts are not similar to loan accounts. The Tribunal further observed that the interest amount has been actually paid by the assessee through Overdraft/Cash Credit account and, therefore, set aside the disallowance made under Section 43B of the Act. 6. A bare reading of Explanations 3C and 3D to Section 43B of the Act provides an answer to the problem by making it clear that where interest amount has not been converted into loan or borrowing (or) loan or advance, as the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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