Allow or not allow

This query is : Resolved

Dheeraj (Querist)
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15 September 2011

An Assessee paid sales tax in previous year, demanded by the Sales Tax Officer for year 1885-86.

Please solve if
a) Demand is to pay tax amount
b) demand is to pay penalty
c) demand is to pay interest.

and also reply if demand is made in respect of Income Tax by income tax officer for the same above three issues

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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15 September 2011 For the sales tax all the above demands are allowable as expenditure for the income tax purpose but the AO has right to disallow the penalty(may be interest or tax amount also) on depending on the case issue. But for the Income tax any of the demand don't allowable as expenditure.
OM SAI SRI SAI JAI JAI SAI

Dheeraj

Dheeraj (Querist)
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24 September 2011 First you are saying that demand is allowable and then saying A.O can disallow the payment.

Please suggest one, whether allowable or not as this is the matter for 85-86

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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24 September 2011 I mean depending on the facts the AO has right to disallow at the time of scrutiny For example due to the violation of law the penalty and interest has been levied then the AO can disallow depending on his satisfication .
OM SAI SRI SAI JAI JAI SAI

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