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Section 43B, read with section 143, of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment - Assessment year 1992-93 - Assessee filed its return claiming deduction in respect of interest accrued, which was payable to creditors - A.O. disallowed assessee's claim and imposed penal additional tax under section 143(1A) - Tribunal held that money borrowed by assessee was from institutions enumerated in section 43B(d) and, accordingly, disallowed deduction - Whether since assessee had material to show that institutions in question did not fall within purview of clause (d) of section 43B and that Tribunal or High Court had also not taken into consideration its contention in regard to liability to pay additional tax under section 143(1A), an opportunity should be given to assessee to prove its case and matter was to be remanded to Tribunal - Held, yes FACTS The assessee, a Co-operative Sugar Mill, filed its return for the assessment year 1992-93, claiming deduction of interest accrued. The Assessing Officer processed the return under section 143(1)(a) and disallowed the deduction claimed by it on account of interest payable to the creditors and, accordingly, imposed penal additional tax under section 143(1A). On appeal, the Commissioner (Appeals) allowed the same. On revenue's appeal, the Tribunal held that the money borrowed by the assessee was from the institutions enumerated in section 43B(d) and, hence, disallowed the deduction. On writ, the High Court dismissed the same. On appeal to the Supreme Court: HELD It was found that there was some confusion in the mind of the Tribunal when it proceeded to consider the case of the assessee for deduction on the ground that the loan in question was taken from a bank which was a bank contemplated under section 43B(d) and since the assessee contended that it had material to show that the loan taken by it and the interest payable was to institutions, which would not fall within clause (d ) of section 43B, in the interest of justice, an opportunity should be given to the assessee to prove its case. Further, since the Tribunal or the High Court had not taken into…

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