03 July 2009
Interest for late payment of direct taxes is not deductible - Interest levied on assessee for delay in filing return would not be allowable as business expenditure - Bharat Commerce & Industries Ltd. v. CIT [1998] 230 ITR 733/98 Taxman 151 (SC).
Interest paid under section 215 for failure to pay advance tax up to statutory percentage would not be allowable as business expenditure - Bharat Commerce & Industries Ltd. v. CIT [1998] 230 ITR 733/98 Taxman 151 (SC).
Interest paid under section 220(2) for late payment of income-tax is not deductible as revenue expenditure - CIT v. Ashoka Mills Ltd. [1996] 88 Taxman 184/218 ITR 526 (Guj.)/CIT v. Raipur Manufacturing Co. Ltd. [1996] 135 CTR (Guj.) 248.
Interest for delayed filing of return is not deductible - It cannot be said that interest paid for delay in filing the return has any connection with the business of the assessee. If income-tax is not a permissible deduction under section 37, any interest payable for default committed by the assessee in discharging its statutory obligation under the Income-tax Act which is calculated with reference to the tax or income, cannot be allowed as a deduction - Orient General Industries Ltd. v. CIT [1994] 209 ITR 490 (Cal.). Interest paid on sales tax arrears is deductible - Interest paid by the assessee to the Sales-tax Department on arrears of sales tax is an admissible deduction under section 37(1) - Lachmandas Mathuradas v. CIT [2002] 254 ITR 799/122 Taxman 828(SC)/CIT v. Western India State Motors [1987] 167 ITR 395 (Raj.)/CIT v. Western Indian State Motors [1988] 174 ITR 116 (Raj.).
Interest on purchase tax arrears is deductible - Interest paid to the Government on arrears of purchase tax is deductible - CIT v. Chodavaram Co-operative Sugars Ltd. [1987] 163 ITR 420 (AP)/CIT v. Shri Sarvaraya Sugars Ltd. [1987] 163 ITR 429 (AP)/Mahalaxmi Sugar Mills Co. Ltd. v. CIT [1986] 157 ITR 683 (Delhi).
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