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TMI Blog2014 (2) TMI 1388X X X X Extracts X X X X X X X X Extracts X X X X ..... onverted into loan or advance. The interest amount has actually been paid by the assessee through Overdraft/Cash Credit account. In view of our above findings, the dis-allowance made u/s.43B is set aside and the appeals of the assessee are allowed. - I.T.A. No. 695/Mds/2012 And I.T.A. No. 696/Mds/2012 - - - Dated:- 10-2-2014 - Dr. O.K. Narayanan, Vice President and Shri Vikas Awasthy, Judicial Member For the Appellant : Shri C. Ananda Kumar, CA. For the Respondent : Shri Guru Bhashyam, JCIT ORDER Per Vikas Awasthy, Judicial Member : The aforesaid two appeals have been filed by the assessee for the Assessment Years (AYs) 2004-05 2005-06. In both the appeals, the common issue is dis-allowance u/s. 43B of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the Tribunal. 3. Shri C. Ananda Kumar, appearing on behalf of the assessee submitted that for the AY.2004-05, dis-allowance to the tune of ₹ 21,35,626/- and for the AY.2005-06, dis-allowance of ₹ 87,73,661/- has been made u/s.43B of the Act. These amounts have been credited to the Cash Credit/Overdraft account of the assessee maintained with the State Bank of India. The assessee has made arrangement with the bank for the payment of interest amount from the Cash Credit/Overdraft account. The interest amounts have actually been paid and the interest expenditure has not been converted into any term loan as alleged by the authorities below. The case of the assessee does not fall within the ambit of exclusions given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxxxxxxx (c)xxxxxxxxxxxxx (d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution or a State financial corporation or a State industrial investment corporation, in accordance with the terms and conditions of the agreement governing such loan or borrowing , or (e) any sum payable by the assessee as interest on any loan or advances from a scheduled bank in accordance with the terms and conditions of the agreement governing such loan or advances, or (f) xxxxxxxxxxxxxxxx Explanation 3C. - For the removal of doubts, it is hereby declared that a deduction of any sum, being interest payable under clause (d) of this section, shall be allowed if such interest has been actually pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the assessee had converted outstanding interest into a term loan liability which was to be paid in instalments in the future years. 8. In the present case, undisputedly the interest payment has been made from Overdraft/Cash Credit account maintained by the assessee. We are of the considered opinion that Overdraft/cash credit accounts are not similar to the loan accounts. The said accounts are operative accounts for the deposit of cash or cheques and to make payments in the normal course of business. The banks extend Overdraft facility to its customers for the smooth running of their day to day business. Overdraft facility is the result of an agreement with the bank by which a current account holder is allowed to draw over and above t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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