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TMI Blog2018 (9) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... borrowed funds cannot be termed as a contingent liability. However, we note that though the assessee had debited ₹ 537.34 lacs i.e. 6.25% of the borrowed funds as interest expenditure and claimed deduction of the same. The said sum was not paid before the due date of filing of the return of income. So, as per section 43B of the Act, the sum of interest not paid cannot be allowed as expenditure in this A.Y. And since the AO has accepted the return of income of the assessee without looking into the fact that the assessee has not remitted the interest to the lender, so as per section 43B of the Act the expenditure claimed on interest incurred on the loan taken, could not have been allowed and, therefore, the order of the AO is errone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of interest of ₹ 537.34 lacs. Aggrieved, the assessee has preferred this appeal before us and has taken the following grounds of appeal: 1. For that the invocation of the jurisdiction u/s. 263 by the Learned Principal Commissioner of Income Tax was bad-in-law so much so that there was no finding in the order under appeal as to how the assessment order is erroneous and prejudicial to the interest of the Revenue. 2. For that the Ld. Principal Commissioner of Income Tax failed to consider (a) the following clause 4 of the related W. B. Government Loan Sanction Letters; 4. Regarding the terms and conditions of the Loan sanctioned hereby a further G. O. will be issued and also (b) the G. O. on the subject mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the assessee had debited ₹ 537.34 lacs i.e. 6.25% of the borrowed funds as interest expenditure and claimed deduction of the same. However, the said sum was not paid before the due date of filing of the return of income. So, as per section 43B of the Act, the sum of interest not paid cannot be allowed as expenditure in this A.Y. And since the AO has accepted the return of income of the assessee without looking into the fact that the assessee has not remitted the interest to the lender, so as per section 43B of the Act the expenditure claimed on interest incurred on the loan taken, could not have been allowed and, therefore, the order of the AO is erroneous as well as prejudicial to the interest of the revenue. In such a scena ..... X X X X Extracts X X X X X X X X Extracts X X X X
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