9911796707
TMI Blog1991 (4) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to the charging of interest under section 201 (1A) in respect of interest payable to M/s. Madan Mohan Lal Shri Ram (P.) Ltd. amounting to Rs. 1,42,127. This interest was neither paid to the said creditor nor was credited to the account of the creditor. The same was, however, accounted for in an account called ' Interest payable account ' and claimed as a deduction in computing the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee admittedly has neither credited the amount of interest to the account of the creditor nor has it paid the same in cash or by the issue of a cheque or draft. What it has done is that it has shown its liability to pay interest by crediting the amount in an account called " Interest payable account " and charging the same to the profit loss account. On the plain language of section 194-A, the li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld, therefore, apply even to the period prior to 1-6-1987. The learned counsel for the assessee contended that this Explanation has no retrospective effect and he referred to the explanatory notes issued by the Central Board of Direct Taxes vide Circular No. 495 dated 22-9-1987. Paragraph 38.6 of these explanatory notes printed at page 1 195 of Taxman's Direct Tax Circulars, Volume III, 1988 editi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the language of section 194-A he could reasonably say and understand that he was not required to do. It, thus, enlarges the obligation of a taxpayer and, therefore, cannot be given retrospective effect when the Legislature itself has clearly said that it will have effect from 1-6-1987. In my view, therefore, the assessee having not paid the interest nor having credited the same to the acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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