{"id":10623,"date":"2015-06-30T17:50:07","date_gmt":"2015-06-30T12:20:07","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=10623"},"modified":"2015-06-30T17:50:07","modified_gmt":"2015-06-30T12:20:07","slug":"dcit-vs-jyoti-ltd-itat-ahmedabad-s-43be-conversion-of-outstanding-interest-into-a-loan-does-not-constitute-actual-payment-of-the-interest-so-as-to-qualify-for-deduction","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/dcit-vs-jyoti-ltd-itat-ahmedabad-s-43be-conversion-of-outstanding-interest-into-a-loan-does-not-constitute-actual-payment-of-the-interest-so-as-to-qualify-for-deduction\/","title":{"rendered":"DCIT vs. Jyoti Ltd (ITAT Ahmedabad)"},"content":{"rendered":"

On perusing Section 43B(e), it is seen that interest on any loan or advance from a schedule bank, in accordance with terms and conditions of the agreement governing such loans or advance, would be allowed as deduction in the previous year in which sum is actually paid by the Assessee. We further find that Explanation 3D has been inserted by Finance Act, 2006 with retrospective effect from 01.04.1997 and the Explanation 3D states that for the removal of doubt it is declared that the deduction, being interest payable, shall be allowed if such interest has been actually paid and any interest referred to in clause (e) which has been converted into a loan or advance shall not be deemed to have been actually paid. In the present case, it is an undisputed fact that a portion of interest has been converted into loan pursuant to the CDR package approved by the Bankers of the Assessee. Considering the express provision of the Act read along with Explanation 3D and in view of the aforesaid facts, we are of the view that the A.O was right in disallowing the claim of Assessee. Before us, ld. A.R. has also relied on the decision of Karnataka High Court in the case of Vinir Engineering Pvt. Ltd. vs. DCIT <\/strong> reported in 313 ITR 154. We are of the view that the ratio of the aforesaid decision would not be applicable to the facts of the present case more so when in that case, the interest was payable to a Finance Corporation and not to a Scheduled Bank and the issue of disallowance was also not with respect to Section 43B(e) of the Act. <\/p>\n","protected":false},"excerpt":{"rendered":"

On perusing Section 43B(e), it is seen that interest on any loan or advance from a schedule bank, in accordance with terms and conditions of the agreement governing such loans or advance, would be allowed as deduction in the previous year in which sum is actually paid by the Assessee<\/p>\n

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