Case Law Details
Analogics Tech India Limited Vs DCIT (ITAT Hyderabad)
ITAT Hyderabad held that interest payment on late payment of TDS is not compensatory in nature and is not allowable as deduction u/s 37(1) of the Income Tax Act.
Facts- Assessee company was selected for complete scrutiny under CASS for the reason of “large expenditure by way of penalty or fine for violation of any law for the time being in force.” During the course of the relevant financial year, the assessee was engaged in manufacturing activity and disclosed a turnover of Rs.1,60,06,46,867/-. As per the 3CD Report, the assessee had debited Rs.34,37,934/- as financial charges for late payment of income tax. However, in the ITR, the same was not disallowed u/s. 37 of the Act. On perusal of the P & L Statement filed by the assessee, it was observed that the assessee had claimed Rs.76,11,490/- under the head an “expenditure by way of statutory payments”.
AO made the addition of Rs.2,49,233/- towards ESI & PF, Rs.12,19,936/- towards interest on TDS and Rs.26,95,847/- towards interest on GST. Accordingly, AO completed the assessment and passed the order u/s. 143(3) r.w.s. 144B of the I.T. Act.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
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