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TMI Blog2023 (1) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year under consideration. Therefore, in the absence of obligation to deduct tax at source, the assessee cannot be held to be an assessee in default and consequential provisions of section 40(a)(ia) have no application. The ratio of case of Pranik Shipping Services Ltd. [ 2012 (3) TMI 210 - ITAT MUMBAI ] is squarely applicable to the facts of the present case. However, the Assessing Officer had no occasion to examine accrual of the interest liability of expenditure since the AO had disallowed the same on the ground that no TDS was deducted. Therefore, we remit the matter to the file of the AO to allow the interest liability for expenditure as allowable expenditure on satisfying himself that the interest liability had crys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax, Cricle-1, Jalgaon ( the Assessing Officer ) vide order dated 21.03.2016 passed u/s 143(3) of the Income Tax Act, 1961 ( the Act ) at loss of Rs.2,47,57,882/-. While doing so, the Assessing Officer disallowed the interest of Rs.1,11,28,956/- claimed to have been accrued on the following unsecured loans :- Sl. No. Name of the party Int. Paid Provision 1 LKP Finance Ltd. Rs.33,00,438/- 2 Sushil Capital P. Ltd. Rs.48,20,470/- 3 Joindre Finance P. Ltd. Rs.10,36,379/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . DR submits that the interest liability cannot be allowed as deduction, as the assessee had failed to comply with the provisions of tax deduction at source placing reliance on the decision of the Hon ble Supreme Court in the case of Palam Gas Service (supra). 9. We heard the ld. Sr. DR and perused the material on record. The issue in the present appeal relates to the allowability of interest expenditure neither accounted in the books of account nor paid during the previous year relevant to the assessment year under consideration. It is settled position of law that in the absence or presence of entries in the books of account does not determine the allowability of interest expenditure while computing the taxable income of an assessee und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of the contract entered by the appellant with the lenders. Thus, the grounds of appeal filed by the assessee stand partly allowed. 10. In the result, the appeal filed by the assessee in ITA No.506/PUN/2019 for A.Y. 2013-14 stands partly allowed. ITA No.512/PUN/2019, A.Y. 2014-15 : 11. Since the facts and issues involved in both the appeals of the assessee are identical, therefore, our decision in ITA No.506/PUN/2019 for A.Y. 2013-14 shall apply mutatis mutandis to the appeal of the assessee in ITA No.512/PUN/2019 for A.Y. 2014-15 respectively. Accordingly, the appeal of the assessee in ITA No.512/PUN/2019 for A.Y. 2014-15 stands partly allowed. 12. To sum up, both the above captioned appeals of the assessee stands p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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