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TMI Blog2014 (6) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment years 2009-10 and 2010-11. 2. Brief facts of the case are that the assessee is an investment company in water related projects promoted jointly by the Government of Tamil Nadu and M/s. Infrastructure Leasing and Financial Services Limited. The assessee had filed its e-return of income. In the assessment order for the assessment year 2009-10, the Assessing Officer has observed that the assessee has booked a sum of Rs. .9,54,29,996/- as interest and finance charges in the profit and loss account and also confirmed that it had not paid any interest during the financial year 2008-09. According to the terms of loan, the assessee had a moratorium period of five years for paying the interest. So, the sum of Rs. .9,54,29,996/- was hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd materials available on record, we find that similar issue had arisen before the Tribunal in assessment year 2003- 04 in the case of assessee itself and the Tribunal vide its order dated 20.11.2007 passed in I.T.A.Nos.29/Mds/2007 and 2508/Mds/2007, had allowed the claim for deduction of interest by observing as under: "2.5 We have heard both the counsels and perused the relevant records. It will be worthwhile here to refer to the clause 1.2 of article I of the loan agreement which is relevant to the issue under consideration, as under: "Interest:- TWICL shall pay to GOTN and IL&FS the respective interest on the principal amount of the Term Finance availed of and outstanding from time to time at the rate as mentioned in the Schedule I he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under.- "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 paid and any interest referred to in that clause which has been converted into a loan or borrowing shall not be deemed to have been actually paid." 2.7 From a reading of the above, it is clear that the said clause pertains to sum payable by the assessee as interest on loan or borrowing from any public financial institution. Public Financial Institution which has been referred to in Explanation (4) of the Income Tax Act which is defined in Section 4A of the Companies Act, 1956 read as under:- "(1) Each of the financial institutions specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd. IL&FS fall within the definition of Public Financial Institution. Hence, the learned Commissioner of Income Tax (Appeals)'s premise that Explanation 3(c) of Section 43B(d) is applicable, is erroneous. As we have already held earlier that as per the reading of loan agreement, the interest amount has very much accrued and the liability has crystallized. In this view of the matter, we hold that order of the authorities below is liable to be set aside and assessee's claim be allowed." 5. The DR could not point out any distinguishable features in the above quoted order of the Tribunal and neither he could bring any material on record to show that the above order of the Tribunal was varied in appeal by any higher forum. We, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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