TMI Blog2019 (12) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... , [ 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. - I.T.A. No.138/CHNY/2018. - - - Dated:- 8-8-2019 - SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER For the Appellant : Mr. R. Clement Ramesh Kumar, Addl. C.I.T D.R For the Respondent : Mr. T. Vasudevan, Advocate ORDER PER INTURI RAMA RAO, ACCOUNTANT MEMBER This appeal of the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)-11, Chennai dated 20.10.2017 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the said return of income, assessment was completed by the Deputy Commissioner of Income Tax, corporate circle 3(2),Chennai (hereinafter referred as AO') vide order dated 04.02.2015 passed u/s.143(3) of the Income Tax Act, 1961 (in short the Act ) at loss of ₹ 2,69,64,291/- after making certain disallowances/additions including the interest paid on delayed payment of Service Tax of ₹ 69,20,334/- on the ground that interest is penal in nature. Being aggrieved, the assessee preferred an appeal before the ld.CIT(A), who considering the provisions of section 75 in the Service Tax Act, Chapter-IV of the Finance Act,1994, held that interest on delayed payment of service tax is only compensatory in nature placing reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present appeal related to allowability of interest paid for belated payment of Service Tax. 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 in (1980) 123 ITR 429 (SC) and C.I.T Vs. Luxmi Devi Sugar Mills P. Ltd., reported in [1991] 188 ITR 41 held that interest is only of compensatory nature and does not take a colour of penalty and therefore, allowable deduction. Therefore, we are of considered opinion that int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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