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2019 (12) TMI 346 - AT - Income TaxDeduction of expenditure u/s 37(1) - Allowability of interest paid for belated payment of Service Tax - allowable deduction or not - HELD THAT:- Admittedly, the interest is paid for belated payment of Service Tax, which is a compensatory nature. It is settled position of law that interest on delay in payment of tax is also part and parcel of tax and it is equally settled position of law that Service Tax paid is also a permissible deduction. The Hon’ble Supreme Court in the case of Mahalakshmi Sugar Mills Co. Vs.C.I.T [1980 (4) TMI 1 - SUPREME COURT] and C.I.T Vs. Luxmi Devi Sugar Mills P. Ltd., [1990 (9) TMI 8 - SC ORDER] held that interest is only of compensatory nature and does not take a colour of penalty and therefore, allowable deduction. There are no merit in the appeal filed by the Revenue - appeal dismissed - decided against Revenue.
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