Case Law Details
DCIT Vs Narayani Ispat (P) Ltd. (ITAT Kolkata)
Interest was paid for delayed payment of service tax & TDS. The interest for the delay in making the payment of service tax & TDS is compensatory in nature. As such the interest on delayed payment is not in the nature of penalty in the instant case on hand.
Hon’ble Supreme Court in the case of Lachmandas Mathura (supra) has allowed the deduction on account of interest on late deposit of sales tax under section 37(1) of the Act. In view of the above, we conclude that the interest expenses claimed by the assessee on account of delayed deposit of service tax as well as TDS liability are allowable expenses under section 37(1) of the Act. As such interest on delayed payment of service tax and TDS was compensatory and not in the nature of penalty and was, therefore, deductible.
Addition of notional interest to be charged from sundry debtors outstanding for a longer period
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