2004 (2) TMI 276

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..... the assessment year 1997-98. 2. The only dispute in this appeal relates to disallowance of interest, which was outstanding as at the end of the previous year. The learned counsel for assessee pointed out that the disallowance cannot be made by invoking the provisions of section 143(1)(a) of the Income-tax Act, 1961 [hereinafter referred to as "the Act"]. In any case, M/s. KSFC, to whom interest .....

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..... s to this fact. Even the stand of the Assessing Officer is supported by the audit statements accompanying the return and, therefore, the disallowance is permissible under the Act. On the face of the financial statements filed by the assessee, the disallowance made is in order and cannot be said to be debatable issue because there can be no debate or discussion that section 43B is applicable to the .....

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..... he Revenue. On the basis of audit statements that were enclosed to the return, it cannot be said that the amount in question was paid. There is no dispute about the fact that the amounts were outstanding and the provisions of section 43B, as explained by the Kerala High Court in the case of Sitaram Textiles Ltd. have carved out an exception to the distinction between incurring liability and paymen .....

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..... clause (a) of section 43B and Explanation 2 thereof. That provision is made for assessees who have deferred to have the scheme framed by the State Government with regard to the sales tax. The benefit allowed thereunder cannot be extended to clause (d) of section 43B wherein the liability to pay interest is dealt with. The order of the Tribunal rejecting the claim of the assessee that the consent .....

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..... an admissible deduction under the provisions of section 43B of the Act. We, therefore, find no merit in this appeal filed by the assessee. 5. We record our appreciation to the learned Departmental Representative Shri Lakshminarayana who has put special effort in canvassing the stand of the Revenue with the help of latest case-laws on the issue. 6. In the result the appeal of the assessee is di .....

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