The Income Tax Appellate Tribunal ( ITAT ), Pune bench ruled that loan received through the state government does not attract section 43B(d) of the Income Tax Act, 1961.
The Assessee Tokai Sahakari Sakhar Karkhana Ltd. filed the appeal before the tribunal against the disallowing interest expenses payable to the government of Rs 3,13,44,000/- under section 43B of the Income Tax Act 1961.
When the matter was considered before the tribunal Anand Partani, the counsel for assessee submitted that the co-ordinate bench’s decision in DCIT Vs. Kallakurichi Co-operative Sugar Mills Ltd. deleting the very nature of disallowance involving “NCDC” thereby holding such loans received through a state government does not attract section 43B(d) of the Income Tax Act.
M.G.Jasnani, Counsel for revenue submitted that sum admittedly relates to the National Cooperative Development Corporation ( NCDC ) which is duly covered under section 43B(d) of the Act being a statutory corporation setup by an Act of Parliament way back in the year 1963.
After analyzing the submission of both parties the bench comprising S.S. Godara (Judicial Member ) and G.D. Padmahshali, ( Accountant Member ) observed that assessment year A.Y.2016-17 held that loans received through a state government does not attract section 43B(d) of the Income Tax Act.
Therefore the bench allowed the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
