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2021 (9) TMI 877 - AT - Income TaxDisallowance of interest on late payment of TDS - Claim of deduction u/s 37(1) on the plea that the delay in remittance of TDS had suffered interest which is compensatory in nature - whether the said payment of interest on late payment of TDS could be construed as compensatory in nature or penal in nature? - HELD THAT:- We find that the payment of interest is provided separately in the statute which is a permissible payment and accordingly compensatory in nature. Apart from this, the statute also provides for payment of penalty which is penal in nature. Hence the legislature in its wisdom had enacted separate provisions for payment of interest and penalty separately. Hence payment of interest on delayed remittance of TDS could not be construed as penal in nature. We find that the reliance in this regard has been rightly placed on case of DCIT vs Rungta Mines Ltd [2018 (10) TMI 672 - ITAT KOLKATA] which dealt with the similar issue of punitive charges paid to Railways for overloading of wagons as an allowable expenditure being compensatory in nature - we direct the ld AO to grant deduction for interest on delayed payment of TDS - Decided in favour of assessee. Disallowance of project expenditure at 10% on an adhoc basis - HELD THAT:- We find that the lower authorities had not given any finding with regard to the aforesaid details filed by the assessee and had simply resorted to make adhoc disallowance of project expenditure at 10% of value thereon without any basis and by passing a cryptic order. Hence we have no hesitation in directing the ld AO to delete the adhoc disallowance made in the instant case. - Decided in favour of assessee.
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