Interest on late payment of service tax is compensatory in nature & shall be treated as a permissible deduction

The Hon’ble ITAT, New Delhi in DCIT v. Planman HR Pvt. Ltd. (ITA No.5152/Del/2017, dated July 15, 2021) disposed of the appeal filed by the Revenue Department (Respondent) and upheld the order passed by the Commissioner of Income Tax (Appeals) (CIT Appeals), deleting the disallowance of INR 54,31,041/- being interest on late payment of service tax and held that, the same is compensatory in nature. Planman HR Pvt. Ltd. (“the Appellant”) is a company engaged in the business of human resources development, that filed its return of income declaring loss of Rs.75,71,378/-. During the course o...