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TMI Blog2023 (4) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the appeal. The Ld. AR for the assesse submitted that the delay was due to pandemic caused by Covid-19 and the period (41 days) are covered by the Hon'ble Supreme Court's order [in Misc. Application No.665 of 2021 vide wherein the Hon'ble Apex Court vide order dated 23.03.2020 had given direction that delay is to be condoned or limitation period to be extended as the case may be during the period between 15.03.2020 to 14.03.2021 which was further extended up to 28.02.2022 in Misc. Application No.21 of 2022 and again extended vide order dated 10.01.2022 up to 28th May, 2022 suo-moto by the Apex Court]. Since, the Hon'ble Supreme Court has condoned delay of the aforesaid period; and the delay of 41 days falls in the aforesaid period, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan/debt was settled by payment of Rs.8.13 crores; and which was in-turn obtained by assessee company from its sister concern M/s. T.S. Hajee Moosa & Co., No.33, Godwon Street, Chennai, which sold its property at No.33, NP Guindy Industrial Estate, Ekkaduthangal, Kalaimagal Nagar, Chennai-97 for Rs.30 crores. The finance charges were claimed as under: - Total amount paid on 31.03.2015 : Rs.8,13,00,000 Less: Amt due as on 31.03.2002 : Rs.2,92,60,642 Excess paid Rs. 5,20,30,358 In order to prove the aforesaid facts, the assessee filed before the AO, copy of balance sheet as on 31.03.2002 and allocation communication received from M/s.Edelweiss about the one time settlement. The AO acknowledged that the allocation communication receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, includes recovery charges collected by M/s.Edelweiss, which activity is not related to the business activity of the assessee company, he disallowed expenses claimed to the tune of Rs.5,20,39,358/-, since it has not been spent wholly or exclusively for the purpose of business. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A), who inter-alia, also found fault with the assessee for not deducting TDS on the repayment of interest and therefore, according to him section 40(a)(ia) of the Act is attracted, since payment has been made to M/s.Edelweiss and not to Canara Bank. Thus, he confirmed the action of the AO. Aggrieved, the assessee is now before us. 5. We have heard both the parties and perused records. We note that the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Amex Garments Pvt. Ltd., which came up before this Tribunal, in ITA No.2513/Chny/2018 for AY 2015-16, wherein the Tribunal accepted the Ld.CIT(A)'s action in that case, allowing deduction claimed by the assessee. We note that the Tribunal in assessee's sister concern case Amex Garments Pvt. Ltd (supra) [vide order dated 30.11.2021] has held as under:- "8. We have heard both the parties, perused material available on record and gone through orders of the authorities below. We have also carefully considered reasons given by the learned CIT(A) to delete additions made by the Assessing Officer towards disallowance of interest paid to bank u/s.43B of the Income Tax Act, 1961. As regards first contention of the Revenue insofar as nexus betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se loans as NPAs and not provided for any interest from 31.03.2002 and until 31.03.2015. It was further noted that bank has assigned debt in terms of assignment agreement dated 26.04.2014 and assigned total debt due from the assessee company to Edelweiss Asset Reconstruction Companies Ltd. It was further noted that the assessee has settled outstanding debts by making one-time payment of Rs.5,04,00,000/- as against outstanding balance of Rs. 1,71,93,738/- and difference amount of Rs.3,32,06,262/- has been accounted as interest payable on loans. The assessee had claimed deduction for said interest u/s.36(1)(iii) on payment basis in terms of provisions of section 43B(e) of the Income Tax Act, 1961. The learned CIT(A) after considering relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded by the learned CIT(A) nor bring on record any decision in favour of the Revenue to support its arguments that before claiming deduction on payment basis in terms of section 43B of the Act, the assessee needs to record such interest in the previous year to which such interest pertains. Therefore, we are of the considered view that there is no error in the reasons given by the learned CIT(A) to delete additions made by the Assessing Officer towards disallowance of interest paid to bank u/s.43B of the Income Tax Act, 1961. Hence, we are inclined to uphold findings of the learned CIT(A) and dismiss appeal filed by the Revenue. 10. In the result, appeal filed by the Revenue is dismissed." 6. Respectfully, following the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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