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2020 (1) TMI 1094 - AT - Income TaxDelay in deposit of ESI and PF employee’s contribution - Addition u/s 2(24)(x) r.w.s. 36(1)(va) - HELD THAT:- The contributions have been deposited before filing the return of income. Therefore, respectively, the following the decision of Hon’ble Rajasthan High Court in case of CIT vs. JVVNL [2014 (1) TMI 1085 - RAJASTHAN HIGH COURT] the addition made by the Assessing Officer is hereby directed to be deleted. - Decided in favour of assessee. Addition u/s 37(1) by disallowing of interest on late payment of TDS - whether such interest is penal in nature or no? - HELD THAT:- As decided in M/S SAND PLAST INDIA LIMITED [2018 (7) TMI 1844 - ITAT JAIPUR] Assessee could not possibly claim that it was borrowing from the State the amounts payable by it as income-tax, and utilising the same as capitalization in its business, to contend that the interest paid for the period of delay in payment of tax amounted to a business expenditure. Therefore, the interest paid under section 201(1A) could not be allowed as business deduction.” Contention regarding section 40(a)(ii) is also not tenable as the same is in context of taxes levied on the profits or gains of business and not in context of taxes by way of TDS on payments made by the assessee and in any case, the interest will partake the character of the principal which is not otherwise allowable. Respectfully following the decisions referred supra, interest on late deposit of TDS u/s 201(1A) cannot be allowed to the assessee and the same has rightly been disallowed by the AO. - Decided against assessee.
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