Interest on delayed payment of TDS not allowable as business expenditure

Govindam Clearing Agencies Pvt. Ltd Vs DCIT (ITAT Jaipur)

AO had disallowed the interest and made an addition of Rs. 18,315/- on account of late deposit of TDS by the assessee.

We find that the facts are undisputed that the assessee has claimed interest as expense incurred for delayed payment of TDS. We find that this interest is paid for default in respect to statutory liabilities and this interest cannot be treated as business expenditure under section 37(1) of the Act.

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