TMI Blog2021 (9) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... est debited in respective month and as such no part of such interest remained which could be said to have been converted into any loan or advance as on the close of the previous year so as to be deemed not actually paid. The order of CIT(A) was held by Tribunal and upheld by Hon ble Calcutta High Court.AO was not justified in disallowing the expenses u/s 43B - Decided in favour of assessee. - ITA No. 28/Del/2018 - - - Dated:- 8-9-2021 - SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. KULDIP SINGH, JUDICIAL MEMBER Assessee by : Shri Ved Jain, Adv. Shri Ashish Goel, Adv. Revenue by : Ms. Anima Baranwal, Sr. D.R. ORDER PER ANIL CHATURVEDI, AM : This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (A)-35, New Delhi dated 07.09.2017 relating to Assessment Year 2014-15. 2. The relevant facts as culled from the material on records are as under : 3. Assessee is a company stated to be engaged in the business of manufacture of food items, bottling of beverages and drinking water. Assessee filed its return of income for A.Y. 2014-15 on 22.11.2014 declaring a loss of ₹ 5,71,06,719/-. The case was selected for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utstanding. It was submitted that after restructuring, out of the aforesaid amount, ₹ 12,25,00,000/- was converted into a fresh term loan and the balance ₹ 7,75,00,000/- be treated as amount withdrawn as per restructured CC limit. The assessee thereafter submitted that overdue interest at the time of restructuring works out to ₹ 1,87,21,328/- (21,87,21,328 20,00,00,000) which was paid subsequently before the filing of income tax return and therefore no disallowance u/s 43B of the Act was called for. The submissions of the assessee were not found acceptable to AO. AO was of the view that Explanation 3D to Section 43B of the Act provides that any interest which is payable and has been converted into loan shall not be deemed to actual paid. He was also of the view that the amount of outstanding against the CC limit as on date of pre-restructuring was converted into a fresh term loan on 29.03.2014 and the amount restructured in a fresh term loan included interest on CC limit as well as on pre-restructured terms loan which was actually not paid but was converted into a fresh term loan, therefore the interest payable cannot be deemed to have been actually paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50192825365 5.75 2.09 3.66 6. Term Loan Account No - 501958825853 3.66 1.32 2.34 7. He further submitted that term loan no 50198822716 with an outstanding balance of ₹ 0.16 crore was not structured. He further submitted that the total loans outstanding was ₹ 32.59 crore as on 31.3.2013 as against the outstanding of ₹ 30.76 crores as on 31.3.2014 which according to him goes to show that the loan had got reduced from ₹ 32.59 crore to ₹ 30.76 crore even after the payment of interest and thus it was not a case of non payment of interest as on there is no change so far the total loan availed is concerned. He further pointed out from the balance sheet that the total amount of loan from Allahabad Bank was reduced from ₹ 32.59 crore (rounded off) (as on 31.03.2013) to ₹ 30.79 crore (rounded off) (as on 31.03.2014) even after payment of interest. He submitted that the bank had only reclassified the different loans under different heads as it is not a case of conversion of bank inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat no disallowance is called for under section 43B of the Act. 8. Learned DR on the other hand supported the order of lower authorities. 9. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to the disallowance made by the AO u/s 43B of the Act. Before us, it is the submission of the Ld AR that bank has charged interest on term loan on month to month basis and the same has been recovered by debiting it to the cash credit (CC) account of the assessee. The Ld AR has also contended that the amounts of credits (deposits) in the cash credit account are much more than the amount of interest debited by bank. The aforesaid contentions of the Ld AR have not been controverted by Revenue nor has it been found to be untrue. 10. We find that in the case of CIT vs. Prakash Foods Feed Mills P. Ltd.(supra) the facts were that the assessee was maintaining Cash Credit/Over Draft account with the bank. For the assessment years 2004-05 and 2005-06, interest was credited to the said account of the assessee. The Assessing Officer held that the term 'paid' means that the amount should have been actually paid and mere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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