M.M. AQUA TECHNOLOGIES LTD. vs. COMMISSIONER OF INCOME TAX, DELHI - III

C.A. No.-004742-004743 - 2021Supreme Court2021 INSC 39711 August 2021Bench: HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN25 pages
For Petitioner: SAHIL TAGOTRAFor Respondent: ANIL KATIYAR
AI SummaryAllowed

What did the Supreme Court hold?

The Supreme Court held that the issuance of debentures in lieu of interest payment constituted an actual payment for the purpose of Section 43B. The Court restored the order of the ITAT, allowing the deduction.

What were the facts?

The appellant claimed a deduction under Section 43B for interest paid to financial institutions by issuing debentures in lieu of cash payment. The Assessing Officer disallowed the deduction, but the CIT and ITAT allowed it, holding that issuing debentures was an actual payment. The Supreme Court reviewed this decision.

What were the issues?

Whether the issuance of debentures in lieu of interest payment qualifies as an 'actual payment' for the purpose of claiming deduction under Section 43B of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 43B

AI-generated summary — verify with the full judgment below

Cited by 308 judgments on BharatTax

See all citing judgments →

Counted from the text of the judgments hosted here. Most recent first.

Cases cited in this judgment(12)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Cause title — parties, addresses and appearances
1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.4742-4743 OF 2021 (Arising out of SLP (Civil) Nos. 35883-35884 of 2016) M.M. Aqua Technologies Ltd. … Appellant Versus Commissioner of Income Tax, Delhi-III … Respondent

J U D G M E N T R.F. Nariman, J

1.

Leave granted.

2.

The question raised in these appeals is with particular reference to Section 43B Explanation 3C of the Income Tax Act, 1961 [the “Act”]. The brief facts necessary to appreciate the controversy raised in these appeals are as follows.

3.

On 28th November, 1996, the Appellant filed a return of income declaring a loss of Rs.1,03,18,572/- for the assessment year 1996-1997. In the return filed by it, the Appellant claimed a deduction of Rs.2,84,71,384/- under Section 43B based on the issue of debentures 2

in lieu of interest accrued and payable to financial institutions. By an order dated 29th October, 1998, the Assessing Officer rejected the Appellant’s contention by holding that the issuance of debentures was not as per

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 43B

All 7,161 judgments and leading authorities on Section 43B →

Recent GST High Court judgments

Search GST case law →