Section 43B: Conversion of interest into shares amounts to payment

Brief of the Case: In the case of CIT vs Rathi Graphics Technologies Ltd. Delhi High Court inter-alia held that the conversion of a portion of interest into shares should be taken to be “actual payment” within the meaning of Section 43B of the IT Act. Facts of the Case: In respect of the Assessee, a rehabilitation scheme was sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) on 1st November 2002. The scheme that was sanctioned was in fact prepared by the Industrial Development Bank of India (IDBI), one of the major lenders of the Respondent. On the loans borrowed by...