During year, assessee had converted interest due to company APIDC into equity shares by issuing 5,05,000 shares of Rs. 10 each.Assessing Officer held that conversion of outstanding interest liability into loan i.e., funding interest or into equity did not amount to actual payment-Accordingly, amount of interest due to APIDC was disallowed under section 43B on ground that same was not actually paid. CIT(A) and Tribunal affirmed the order of the Assessing Officer. On appeal the Court held that  since liability of assessee to pay interest ceased to exist on issue of shares in favour of APIDC, same would tantamount to actual payment within meaning of section 43B and, thus, assessee would be entitled to deduction under section 43B of the Act. (AY. 1999-2000)