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TMI Blog2011 (6) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue. - 392 of 2005 - - - Dated:- 20-6-2011 - Mrs.JUSTICE CHITRA VENKATARAMAN, Mr.JUSTICE P.P.S.JANARTHANA RAJA, JJ. For Appellant : Mr.T.Ravikumar For Respondent: No appearance J U D G M E N T CHITRA VENKATARAMAN, J. This Tax Case Appeal is filed by the Revenue as against the order of the Tribunal relating to the assessment year 1995-96 raising the following substantial question of law: "Whether in the facts and in the circumstances of the case, the Tribunal was right in holding that conversion of overdue interest into funded interest by the financial institutions would constitute actual payment of interest under Section 43B?" 2. The assessee claimed deduction under Section 43 B of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss account for the payment of interest. Aggrieved by the decision, the Revenue is on appeal before this Court. 3. In spite of service of notice on the assessee, there is no representation for the assessee. Hence, after perusing the records and after hearing the arguments of the learned standing counsel appearing for the Revenue, the present order is passed. 4. As rightly pointed out by the learned standing counsel appearing for the Revenue that in the decision reported in (2001) 255 ITR 491 (Kalpana Lamps and Components Ltd. V. Deputy Commissioner of Income-Tax), this Court had an occasion to consider the similar claim and pointed out that a mere postponement of liability to pay interest did not amount to discharge, whether actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quated with actual payment which requires that money must flow from the assessee to the public exchequer as required under Section 43B. By no stretch of imagination can it be said that furnishing of bank guarantee is actual payment of tax or duty in cash. The bank guarantee is nothing but a guarantee for payment on some happening and that cannot be actual payment as required under Section 43B of Act for allowance as deduction in the computation of profits. Section 43B, after amendment with effect from April 1, 1989, refers to any sum payable by the assessee by way of tax, duty or fee by whatever name called under any law for the time being in force. The basic requirement, therefore, is that the amount payable must be by way of tax, duty and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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