Allowance of interest
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
21 March 2010
dear sir
i want to ask whether interest paid on delayed payment of custom duty for clearance of goods from warehouse is allowed under income tax act as deduction or not.
Thanks for your concern.
i want to ask whether interest paid on delayed payment of custom duty for clearance of goods from warehouse is allowed under income tax act as deduction or not.
Thanks for your concern.
CA CHINTAN AJMERA
(Expert)
21 March 2010
Yes it is allowed.
21 March 2010
First of all understand that interest is not an allowance. The moot point is whether it is an allowable DEDUCTION(not an allowance) under section 37 of The Income tax Act,1961 or not. As per my understanding, the interest , referred in the query,is a compensatory payment and hence rightly allowable as a deduction.
Citation :-Swadeshi Cotton Mills ltd 233 ITR 199 (SC) can be relied upon though delivered under a different statute.
Citation :-Swadeshi Cotton Mills ltd 233 ITR 199 (SC) can be relied upon though delivered under a different statute.
CA Ravi Sisodia
(Expert)
21 March 2010
yes allowable
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