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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 ..... e is of no consequence - Therefore, no fault can be found with the order of the Tribunal dated 26/10/.2009 - in favour of respondent- assessee and against appellant-revenue. - Income Tax Appeal No. 602 of 2011 - - - Dated:- 30-10-2012 - J.P. Devadhar And M.S. Sanklecha, JJ. Appellant Rep. by : Mr. Vimal Gupta, Sr. Adv with Ms. Padma Divakar Respondent Rep. by : Mr.Atul K. Jasani JUDGEMENT Per : M S Sanklecha, J : This appeal by the revenue under Section 260 A of the Income Tax Act, 1961 ( the Act ) is against the order dated 26/10/2009 passed by the Income Tax Appellate Tribunal ( the Tribunal ) relating to the assessment year 2004-05. 2) Being aggrieved, the following questions of law have been formulated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 lacs payable by him to Shree Mahalaxmi Mercantile Co-operative Bank Limited on a loan taken. During the course of the assessment proceedings the Assessing Officer noticed that the aforesaid amount of interest of Rs.52.85 lacs had not been actually paid even upto the date of filing of return of income for the assessment year 2004-05. Consequently, the Assessing Officer in his assessment order dated 30/11/2006 disallowed the deduction/expenses claimed by the assessee on account of interest of Rs.52.85 lacs under Section 43B of the Act and added it back to the income of the assessee. 5) Being aggrieved, the respondent-assessee filed an appeal to the Commissioner of Income Tax (Appeals). By an order dated 25/9/2008, the Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the meaning of scheduled bank under Section-43B of the Act read with Section 11(5) (iii) of the Act. In the circumstances he contends that the deduction/expenses of Rs.52.85 lacs being the interest payable to Shree Mahalaxmi Mercantile Cooperative Bank Limited is not allowable in view of the bar under Section 43B of the Act. As against the above, Mr. Atul Jasani, Advocate for the respondent-assessee submits that though there is no dispute about the non-payment of interest till the date of filing of the return, the same is not germane to the controversy at hand. Mr. Jasani submits that Section 43B of the Act is not applicable to the payment of interest made to Shree Mahalaxmi Mercantile Co-op. Bank Ltd. In support of his submission, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned to it in the Explanation to clause (iii) of sub-section (5) of section 11; Section 11(5)(iii) of the Act is reproduced along with the explanation as under: (iii) deposit in any account with a scheduled bank or a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a cooperative land development bank). Explanation- In this clause, scheduled bank means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act to determine whether or not Shree Mahalaxmi Mercantile Cooperative Bank limited is included within the meaning of a Scheduled Bank. Sub Clause (iii) of sub section 5 of Section 11 speaks about the deposit of any amount in a scheduled bank or co-operative Society engaged in banking but the same is of no consequence. This is for the reason that for purposes of Section 43B of the Act we would be governed by the meaning given in the explanation to Section 11(5) (iii) of the Act and not by the main part thereof. Therefore, no fault can be found with the order of the Tribunal dated 26/10/.2009. 9) In view of the above clear position of law both the questions of law (a) and (b) are answered in the affirmative i. e. in favour of the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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