9911796707
TMI Blog2020 (1) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... n 36(1)(va) of the Income Tax Act, 1961 on account of delay in payment of ESI and PF made by the learned AO. 2. In the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the addition of Rs. 34,644/- u/s 37(1) of the Income Tax Act, 1961 by disallowing of interest on late payment of TDS made by the learned AO." 2. In Ground No. 1, the assessee has challenged the confirmation of addition of Rs. 3,15,533/- under the provisions of section 2(24)(x) read with section 36(1)(va) of the Income Tax Act, 1961 on account of delay in deposit of ESI and PF employee's contribution. In this regard, undisputed facts that the contributions have been deposited before filing the return of income. Therefore, respectively, the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the material available on record. We have also gone through the decision of Hon'ble Karnataka High Court in case of Oriental Insurance Company Ltd. However, the said decision doesn't support the case of the assessee as the issue before us is about deductibility of interest on late deposit of TDS and not whether such interest is penal in nature or not. We had an occasion to examine similar matter in case of M/s Sand Plast India Limited vs. DCIT, Alwar (in ITA No. 310/JP/2018 dated 24/07/2018) wherein we have held as under:- "11. As far as interest on late payment of TDS u/s 201 (1A) is concerned, useful reference can be drawn to the decision of Hon'ble Bombay High Court in case of Ferro Alloys Corporation Ltd vs. CIT (1992) 196 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 201(1A), therefore, would not assume the character of business expenditure and could not be regarded as a compensatory payment. Income-tax is not allowable as business expenditure. The amount deducted as tax is not an item of expenditure. The amount not deducted and remitted has the character of tax and has to be remitted to the State and cannot be utilised by the assessee for its own business. The Supreme Court in the case of Bharat Commerce & Industries Ltd. v. CIT [1998] 230 ITR 733/ 98 Taxman 151 rejected the argument that retention of money payable to the State as tax or income-tax would augment the capital of the assessee and the expenditure incurred, namely, interest paid for the period of such retention, would assume t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
