Section 43B :Whether conversion of interest payable to bank into preference shares can be considered actual payment?

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One of the most common disallowances of business expenditure  AO resort while computing profits from business or profession is disallowance under section 43B of the Income Tax . So twisting and misreading of the clauses in favour of revenue is quite common. That is the reason controversial disallowances are often done by Revenue Authorities. Here is one such an issue of disallowance u/s 43B.

It is common practice among banks, financial institutions (lenders debtors to restructure the loan repayment in order to save the loan from becoming Non-Performing Asset (NPA). The restructuring of loan provides relief to ailing business by reducing the interest burden and therefore gives a new life to business.

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