Allowing the appeal of the revenue the Court held that ; conversion of unpaid interest into funded interest Loan is held to be not allowable as deduction in view of Explanation 3C to section 43B inserted with retrospective effect from 1-4-1989 , by the Finance Act , 2006 . (AY.2001-02 )
CIT v. Gujarat Cypromet Ltd. ( 2019) 412 ITR 397 / 177 DTR 121/ 262 Taxman 93 / 308 CTR 309(SC) Editorial: Decision in CIT v Gujarat Cypromet Ltd. (2019] 412 ITR 398 (Guj) (HC) is reversed .
S. 43B : Deductions on actual payment -Interest payable to Banks — Conversion of unpaid interest into funded interest Loan- Not allowable as deduction- Explanation 3C to section 43B inserted with retrospective effect from 1-4-1989 by the Finance Act , 2006 .