allowability of business expenditure

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)
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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)
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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)
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28 June 2010 No it is not.