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TMI Blog2015 (11) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... has filed concise grounds of appeal, which are taken on record. 3. The ground no.1 is general ground of appeal, wherein, the assessee has pleaded that the ld.CIT(A) has passed order without appreciating the facts and submissions of the assessee. No specific arguments were advanced on this issue, rather, it is an ancillary argument in support of other grounds. Therefore, no specific finding is required to be recorded. 4. The ground no.2 and 3 are inter-connected. In these grounds of appeal, the assessee has pleaded that the ld.CIT(A) has erred in confirming the disallowance of Rs. 4,62,427/-. 5. Brief facts of the case are the assessee is a company engaged in the business of running hotels at Jodhpur, Udaipur and Ahmedabad. It has filed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the judgment of the Hon'ble Delhi High Court in the case of CIT Vs. M/s. Shree Ram Pistons and Rings Ltd., 220 CTR (Del) 404. 8. The learned DR, on the other hand, relied upon the orders of the Revenue authorities. She contended that the expenses can be claimed, if they are related to the relevant accounting year. She also emphasized that the expenses are crystallized in this year, then also they can be claimed. But the assessee failed to demonstrate that this expenditure have been crystallized in this year. 9. We have duly considered rival contentions and gone through the record carefully. As far as the admissibility of expenses are concerned, that has not been disputed. Similarly, the AO has not doubted genuineness of the expenditure. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtent of debt liability. The assessee has liability of Rs. 46,40,983/- towards IDBI and Rs. 14,38,282/- towards LIC. The ld. AO did not allow the claim of the assessee on the ground that the alleged payment in the shape of issuance of equity shares of the assessee-company to these financial institutions, does not amount to actual payment as per section 43B of the Income Tax Act, and therefore, the assessee cannot claim deduction. 12. Appeal to the CIT(A) did not bring any relief to the assessee. 13. Before us, the issue is whether the issuance of equity shares of the assessee-company to the financial institutions amounts to actual payment of interest liability or not. According to the assessee the liability of Rs. 60,79,265/- being the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same amount, may be in different kinds of accounts in the books of the assessee. The conversion of interest into loan, and issuance of equity shares in lieu of interest payment being very basic similarity, therefore, does not amount to actual payment. in our opinion, Explanation 3C only prohibits an assessee for recognizing the actual payment of interest by converting its interest into loan or borrowings. In other words, if an assessee has interest liability, and he converts that interest liability in further loan, then that will not amount to payment of interest under section 43B as per Explanation-3C. If an assessee has issued equity shares, which anyone can acquire, and it has a trading value, it would not construe that the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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