TMI Blog2018 (9) TMI 2110X X X X Extracts X X X X X X X X Extracts X X X X ..... s not covered u/s 40(a)(ia) - HELD THAT:- In the case of Martin Harris (P.) Ltd. [ 1989 (7) TMI 342 - CALCUTTA HIGH COURT] has held that whenever interest is charged under the Act, whether for delayed payment of tax or filing underestimate of tax or for non-submission of the estimate or return or for default in filing return within the time or delay in making payment of tax, it cannot be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... italisation 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 - Assessee dismiss the appeal. - ITA No. 2068/MUM/2017 - - - Dated:- 12-9-2018 - Shri Sandeep Gosain (Judicial Member) And Shri N.K. Pradhan (Accountant Member) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered u/s 40(a)(ia) of the Act. 3. During the course of assessment proceedings, the AO noticed that the assessee had claimed an additional sum of Rs.10,31,303/- being interest on late deduction and deposit of TDS. The issue here relates to the disallowance of Rs.10,31,303/- made by the AO in respect of interest on late deposit of TDS. In appeal, the Ld. CIT(A) confirmed the above disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return within the time or delay in making payment of tax, it cannot be allowed as deduction in computing total income as essentially interest in such a case for non-compliance with the provisions of the Act is inextricably connected with the amount of income tax. Where Incometax itself is not a deductable amount, be it compensation or be it penalty, payable in addition to the tax cannot be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate 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 the character of business expenditure. It held that an 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 capitalisation in its business, to conten ..... X X X X Extracts X X X X X X X X Extracts X X X X
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