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TMI Blog2020 (6) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of Rs. 2,34,079/- on account of interest on late payment of TDS under section 201(1A). 3. Briefly stated fact is that the Assessee is a partnership firm and engaged in the business of construction. The assessee during the year under consideration paid interest on late deposit of TDS for Rs. 2,34,079/- only. The assessee claimed the same as business expenses. The contention of the assessee is that the provision of section 40(a)(ii) of the Act prohibits the deduction of payment of taxes levied on profit or gain of the business. However TDS is not paid on profit or gains of the business, therefore interest paid under section 201(1A) is allowable as business expenses as the same does not constitute the part of the taxes which is levied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a full court decision of Hon'ble AP High Court, in the case of CIT vs B R Constructions [(1993) 202 ITR 222 (AP)], a judicial precedent ceases to be a binding precedent when it is passed per irrcurium. In view of the above, the AO has correctly' followed the decision of Honourable Madras High Court (supra) and disallowed the interest on TDS u/s. 37 of the I. T. Act, 1961. The ground of appeal is accordingly dismissed." 6. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 7. The learned AR for the assessee before us filed a paper book running from pages 1 to 47 and submitted that the Kolkata Tribunal in the case of DCIT Vs. Narayani Ispat Limited in ITA N0. 2127/Kol/2014 vide order dated 30- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit of and to the credit of the recipient of the income on which that tax is payable, does not in any manner alter the character of the payment, namely, its character as income-tax. The interest paid under section 201(1A), therefore, would not assume the character of business expenditure and could not be regarded as a compensatory payment." Before parting, it is important to note that we have decided the identical issue in favour of the assessee in the case of M/s Narayani Ispat Pvt. Ltd. (supra). However, we are changing our decision in the present case for the simple reason that the judgment of Hon'ble Madras High Court in case of CIT vs. Chennai Properties & Investment Ltd reported in 105 taxmann 346 was not brought to our notice while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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