Interest on of arrears of Sugar cess is compensatory in nature & allowable: SC

Mahalaxmi Sugar Mills Co. Ltd. Vs CIT (Supreme Court of India) The case of Mahalaxmi Sugar Mills Co. Ltd. vs. CIT revolves around the deduction claim for interest paid on arrears of cess under the U.P. Sugarcane Cess Act, 1956. The appellant, Mahalaxmi Sugar Mills, argued that this interest should be deductible under section 10(2)(xv) of the Indian Income Tax Act as an expenditure laid out wholly and exclusively for the purpose of business. The dispute arose when the Income Tax Officer disallowed this deduction, asserting that the interest payment was akin to a penalty rather than a business e...