allowability of business expenditure

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 June 2010 i want to specifically know whether interest u/s 220(2) and interest u/s 234D of the Income tax Act is allowable as business expenditure

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

24 June 2010 Not allowable as business expenditure.

Citation:- CIT Vs. Ashoka Mills Ltd (1996) 218 ITR 526(Guj).

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2010 interest u/s 234D of the Income tax Act is allowable as business expenditure

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

26 June 2010 Interest payable under the provisions of the Act is also covered - Payment of income-tax is not deductible as per section 40(a)(ii); hence, interest under sections 139, 215 and 217 which is to be regarded as accretion to tax, cannot also be allowed to be deducted - Assam Forest Products (P.) Ltd. v. CIT [1989] 180 ITR 478 (Gauhati).

On the same principle, interest payable under sections 220(2), 234A, 234B or 234C is also not deductible.

Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2010 interest u/s 234D (interest on excess refund of income tax) of the Income tax Act is allowable as business expenditure

Aditya Maheshwari

Aditya Maheshwari (Expert)
Follow

28 June 2010 No it is not.