9911796707
TMI Blog2022 (2) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... ch devolved and crystallized only during the relevant year under consideration before us, owing to realization of its dues by IBFSL in one shot from the assessee. It is not a case as if the Revenue has been deprived of any tax. In fact, by not claiming interest expense in the earlier years, assessee has reported higher amounts of total income. Hence, there is no loss of tax to the Revenue. We are of the considered view that Ld. CIT(A) was not justified in sustaining the disallowance of interest expense claimed by the assessee in his profit and loss account when the documentary evidence to substantiate the claim were placed on record. We accordingly set aside the finding given by the Ld. CIT(A). Consequently, addition made by the Ld. AO b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence the same fails under the second limb of the provisions of section 40(a)(ia) and hence are fully allowable during the AY 2013-14. 3. The Ld. counsel for the assessee at the outset has submitted that sole issue involved in the present appeal pertains to disallowance of interest expense of ₹ 5,82,80,708/- by holding it as prior period expense despite the fact that actual credit and payment of this interest amount and TDS relating thereto occurred in A.Y. 2013-14 i.e. the assessment year under consideration. 4. From the brief facts culled out from the material on record and submissions made in the appellate proceedings, it is observed that the appellant assessee is an individual and trader in shares, securities and commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 31.12.2012. It was submitted by the Ld. Counsel that IBFSL accounted for interest income from the appellant in the sum of ₹ 7,05,45,624/- in its books of account for the financial year 2012-13 relevant to A.Y. 2013-14 for which the appellant also correspondingly accounted the same in his books of account as interest expense since the loan account was settled by IBFSL suo motto. The Ld. Counsel strongly submitted that the interest liability on the appellant devolved and crystallized only during the assessment year under consideration owing to the dispute, the same being contingent in nature for the earlier years. 6. It is also brought to our attention that the appellant has not claimed interest expenditure in any of the earlier a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned representatives of the parties and perused the material placed on record. We observe that in this case, admittedly the genuineness of interest expenditure has not been doubted nor the assessee has claimed the interest expense for the period from 05.06.2009 to 31.03.2012 in the financial years 2009-10, 2010-11 and 2011-12. We find merit in the contention of the Ld. AR that interest liability on the appellant crystallized only during the assessment year under consideration owing to the dispute with IBFSL. We also note the fact that IBFSL from whom the assessee borrowed the amount has recognized and accounted for interest income in its books account in the financial year 2012-13 relevant to A.Y. 2013-14 only and not in the earlier years ..... X X X X Extracts X X X X X X X X Extracts X X X X
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