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2015 (2) TMI 810 - HC - Income TaxApplicability of provisions of section 43B to interest payable on purchase duty - whether interest is a part and parcel of tax liability ? - Held that:- Interest that becomes payable on tax, which is otherwise permissible for deduction under the provisions of the Income-tax Act, while computing the total income, is part of tax, within the meaning of section 43B of the 1961 Act. If the contention of the respondent that the component of interest must be permitted to be deducted just by making a provision and not making actual payment, it will lead to almost a semblance of absurdity. If the actual tax, duty, or cess can be deducted only on payment, it is just un-understandable as to how the interest thereon can be deducted without making payment thereof. Take an instance, where an assessee is placed under obligation to pay the tax, the duty or cess of ₹ 5,00,000 and it remained unpaid for about 5 or 6 years. He cannot make deduction thereof, because it was not paid. If the law, under which the tax, duty or cess is levied, provides for payment of interest, and a substantial amount had accrued on that amount, the assessee may try to get the benefit of deduction of that equivalent amount, without actually paying it by treating as separate and independent of the tax liability. Such a situation may, in fact, lead to absurdity, and courts would never permit it. - Decided in favour of revenue.
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