9911796707
TMI Blog2009 (9) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... able from 1996 to 2000 - interest cannot be said to have accrued to become due and payable in the relevant P.Y. interest cannot be said to have accrued to become due and payable in the relevant previous year – disallowance of interest u/s 36(1)(ii) read with S. 43B(d) upheld - Once this issue was alive and pending and the appellant company could have succeeded in the Special Leave Petition in the SC, clearly, the liability remained contingent and could not be said to have been crystallized – assessee’s petition dismissed X X X X Extracts X X X X X X X X Extracts X X X X ..... a substantial question of law. We also agree that the change in the method of valuation of the closing stock was not bona fide because the authorities below have noted that for the assessment year in question seeking of change in the method of valuation of the closing stock was in the year where there were huge rise in the profits of the assessee company and the change was adopted in order to reduce profits in the relevant year. The fact that the change is not bona fide is more than abundantly clear from the fact that the assessee once again switched back to the old method of valuation of closing stock just one year thereafter in the assessment year 1993-94. The contention of the counsel for the appellant that assessee company was entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find any error in the approach of the authorities below. Merely because the interest was debited in the books of accounts maintained on mercantile basis would not mean that the interest had become due and accrued because admittedly the interest liability would become due not during the relevant previous year but only for the first time on 18.11.1996. Thus, interest cannot be said to have accrued to become due and payable in the relevant previous year. The stand of the assessee is incongruous because on the one hand it claims that interest became due and accrued in the relevant previous year however in the same breadth it admits that the same would be due and payable only with effect from 18.11.1996. The concept of debiting the books mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The aforesaid provision makes it more than abundantly clear that interest can only be allowable when the same is actually paid and not merely because the same is due as per the method of accounting adopted by the assessee. Any other interpretation as suggested by the appellant that the interest should be allowed even when not actually paid will defeat the very purpose of Section 43B. The contention of the assessee that it has received the loan from Sugar Development Fund administered by the Ministry of Sugar, Government of India, is liable to be rejected at the threshold because admittedly the loan is obtained from IFCI by the assessee. It is the IFCI with whom the documentation for the loan has been signed and to whom the loan along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company subject to the following conditions: (i) that the appellant would furnish advance bank guarantee for the excess realization along with interest, and (ii) that in the event of the ultimate orders of the High Court going against the appellant, the appellant would have to refund the excess realization along with interest @ 12 ½% per annum. 7. Pursuant to the interim order the appellant had realized an excess price of levy sugar of Rs. 158 lakhs. When the Writ Petition filed by the appellant had dismissed by the Allahabad High Court, the excess amount realized by the appellant company due to the price of levy sugar became repayable along with interest in terms of interim orders of the Allahabad High Court. However, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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