Allowance of interest

I think it will not allow. as section 43b provides that interest shall be allowed if such interest has been actually paid by him.

The act talks about only actual payment of such sum. whether any decided case law available for this situation ?

It is one & the same, you are not paying but your debtor is paying, now you will adjust the same in his account, I think so interest should be deductible..

The main twist is, let EMI be Rs. 200, 000 out of which interest comes to Rs 40, 000 and co. claims such interest. If the debtor had paid to company directly Rs. 200, 000 co. could not claim any expenditure. It may or can be argued that co. had such arrangement to evade tax.. by claiming expenditure as interest.. Now what u think ????