Marvex Pipe Tech Private Limited Vs ITO (ITAT Ahmedabad)
GST Paid u/s 43B Allowed & Late Payment Charges Not a Penalty: Ahmedabad ITAT Deletes Disallowances
Ahmedabad ITAT (Bench “D”) in Marvex Pipe Tech Pvt. Ltd. vs. ITO, Ward-2(1)(1), Ahmedabad (ITA No.1820/Ahd/2025, AY 2022-23, order dated 19.12.2025) allowed the assessee’s appeal and deleted both disallowances sustained by CIT(A)/NFAC.
The Tribunal held that GST paid during the year, though pertaining to an earlier period, was rightly claimed as deduction u/s 43B, since it was actually paid in the relevant previous year and had not been claimed earlier. Hence, disallowance of ₹1.86 lakh treating the same as inadmissible expenditure was unjustified.
On late payment charges of ₹5.37 lakh, the Tribunal noted that the amount was paid as interest to creditors for delay in payment of dues and did not partake the character of a statutory penalty. Such charges being compensatory in nature were held to be allowable business expenditure u/s 37.
Accordingly, both additions were deleted and the appeal of the assessee was allowed in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the Assessee against the appellate order dated 29.07.2025 passed by the Commissioner of Income Tax (Appeals)National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2022-23.
