Whether allowable

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2015 my company not deposit service tax and interest on delay deposit of service tax now my company have received a notice for penalty and interest now question is arises that penalty and interest paid whether allowable as per income tax while computing income of company.

Amol S Joglekar

Amol S Joglekar (Expert)
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26 September 2015 Penalty is NOT allowed. Interest can be allowed under income tax.

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2015 dear sir,
please mention if any case law is regarding this matter.

Amol S Joglekar

Amol S Joglekar (Expert)
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26 September 2015 no case law is required for claiming the interest.

There are certain case laws for disallowance of PENALTY.

Interest in the nature of PENALTY (In some VAT cases) is also disallowed.

In your case it is service tax interest, and hence there is no any element of PENALTY in it and hence allowable in regular course of business.

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2015 Dear sir,
please mention case law if any for disallowance of penalty please mention.

Amol S Joglekar

Amol S Joglekar (Expert)
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26 September 2015 Please go through following links one by one to have a CLEAR understading of the what is allowed. They have given the case laws as you are asking for.

https://www.itatonline.org/articles_new/the-law-on-deductibility-of-expenditure-incurred-for-an-unlawful-purpose/

https://indiankanoon.org/doc/131660/

https://taxguru.in/income-tax/penalty-fine-violation-procedural-law-disallowed-bombay-hc.html

https://indiankanoon.org/doc/129560600/?type=print

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