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TMI Blog2012 (11) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... on by this Court. A) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in deleting the disallowance of Rs.52,85,205/- made by the Assessing Officer u/s. 43B of the Income Tax Act being interest payable by the assessee to Shree Mahalaxmi Mercantile Co-operative Bank Limited even though there was no evidence furnished by the assessee to substantiate the claim that the assessee had made the payment of interest before the filing of his return of income? B) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that Shree Mahalaxmi Mercantile Co-operative Bank Ltd. is not a scheduled bank within the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) dismissed the respondent-assessee's appeal on the ground that it is an admitted position that the interest of Rs.52.85 lacs had not been paid to Shree Mahalaxmi Mercantile Co-operative Bank Limited upto the date of filing of the return. In the circumstances, on application of Section 43B of the Act the order of the Assessing Officer dated 30/11/2006 was upheld. 6) On second appeal, the Tribunal by its order dated 26/10/2009 held that Section 43B of the Act would not apply in case of payment of interest to a co-operative bank for the reason that the section is applicable only in respect of interest payable on a loan taken from a scheduled bank. Under terms of Explanation 4(aa) to Section 43B of the Act a scheduled bank would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n an order of the Tribunal dated 26/10/2009 and states that no substantial question of law arises and the appeal be dismissed. 8) We may usefully reproduce the relevant portion of Section-43B of the Act and Section 11(5)(iii) of the Act for an appropriate adjudication of the present controversy. The relevant portion of Section 43B of the Act reads as under: "Certain deductions to be only on actual payment. 43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- (a) ...... (b) ...... (c) ...... (d) .....or (e) any sum paya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980) or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 ( 2 of 1934);" From the reading of the above sections, it is amply clear that Section 43B of the Act is applicable only in respect of any amount paid as interest to a scheduled bank. A scheduled bank as defined in Explanation 4 to Section 43B of the Act would have the same meaning as contained in the Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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