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TMI Blog2014 (11) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... overdraft/cash credit accounts are not similar to loan accounts. The Tribunal further observed that the interest amount has been actually paid by the assessee through Overdraft/Cash Credit account and, therefore, set aside the disallowance made under Section 43B of the Act. A bare reading of Explanations 3C and 3D to Section 43B of the Act provides an answer to the problem by making it clear that where interest amount has not been converted into loan or borrowing (or) loan or advance, as the case may be, there is no question of denying the benefit of deduction. In the case on hand, the interest amount has been actually paid by the assessee through Overdraft/Cash Credit account and the same has not been converted into loan or borrowing (o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 43B of the Act, the interest amount. 2.2. The assessee preferred appeals to the Commissioner of Income Tax (Appeals), who dismissed the appeals confirming the order passed by the Assessing Officer. 2.3. Challenging the said order, the assessee preferred further appeals before the Tribunal. The Tribunal allowed the appeals filed by the assessee holding that the interest amount has actually been 'paid' by the assessee through Over Draft/Cash Credit account and that the interest amount has not been converted into loan or advance. 2.4. Calling in question the said order, the present appeals are filed by the Revenue on the question of law, referred supra. 3. We have heard the learned Standing Counsel appearing for the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed if such interest has been actually paid and any interest referred to in that clause which has been converted into a loan or advance shall not be deemed to have been actually paid. 5. The department declined to grant the benefit of deduction on interest paid primarily on the plea that the amount has not been actually paid and transfer of amount from one account to another account cannot be treated as paid. However, the Tribunal repelled the said plea by interpreting Section 43B of the Act and held that overdraft/cash credit accounts are not similar to loan accounts. The Tribunal further observed that the interest amount has been actually paid by the assessee through Overdraft/Cash Credit account and, therefore, set aside the disal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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