No deduction for payment for discharge of outstanding loan liability

Perfect Thread Mills Ltd Vs. DCIT (ITAT Mumbai) No deduction allowable when creditor gets overriding title and payments are directly paid to creditors without routing through owner’s accounts Conclusion:  Since there was no diversion of sale proceeds by overriding title, but on the contrary, there was only a mere application of the sale proceeds realised on sale of plots towards the discharge of outstanding loan liability of assessee thus, the consideration from sale of property to the extent of principal component of loan adjusted by the bank could not be treated as ‘diversion of inc...