Tally for CAs in Industry Silver Edition (Single User) Tally Renewal (Auditor Edition) Need Tally for Clients? (Tie-up with us!!!)
Open DEMAT Account with in 24 Hrs and start investing now!
ITAT-Constitution of Benches »
Open DEMAT Account in 24 hrs
 Minimising tax liabilities by lawful means not illegal, says ITAT
 Interest paid on Late Payment of Service Tax is a Deductible Business Expenditure: ITAT
 ITAT upholds Addition on Account of Unaccounted Cash as no mention of Agricultural Land on Translated Document
 Delay in filing of Income Tax Return due to Financial Difficulties: ITAT quashes Penalty
 ITAT deletes penalty on Undisclosed Income u/s 271AAA
 M/s Singh Consultancy Pvt. Ltd. 1106 Indra Prakash Building, 21 Barakhamba Road, New Delhi Vs. Income Tax Officer, Ward-8(4), New Delhi
 Penalty proceedings u/s 271(1)(c) not sustainable if reason not specified: ITAT
 Notice issued u/s 143(2) to be served upon the assessee within six months: ITAT
 Addition for Unexplained Cash Credit justified in respect of Unexplained Creditors shown as Bogus: ITAT
 Input Service Tax Credit is deductible u/s.37(1) when such Input Tax Credit is written off in Books of Accounts: ITAT
 ITAT allows Deduction u/s 35(1)(ii) on Account of Donation
 ITAT can t dismiss application merely on the basis of seeking frequent adjournments: Delhi High Court

Interest paid on Late Payment of Service Tax is a Deductible Business Expenditure: ITAT
July, 23rd 2021

Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the amount of interest paid for the delayed payment of services tax shall be treated as a permissible deduction from the Business Income for the purpose of section 37 of the Income Tax Act, 1961.

The assessee is a company engaged in the business of human resources development, filed its return of income on 30.11.2014 declaring loss of Rs.75,71,378/-. During the course of assessment proceedings, the AO observed that the assessee company has claimed expenses on account of interest on late payment of service tax of Rs.54,31,041/- and he rejected the claim of deduction towards the same. However, the Commissioner of Income Tax (Appeals) overruled this view and allowed the benefit to the assessee.


While disposing of the appeal filed by the Revenue, the Tribunal bench comprising Judicial Member Suchitra Kamble and Accountant Member R.K. Panda held that the CIT(A) deleted the disallowance holding that the interest on late payment of service tax is compensatory in nature relying on the decision of the Coordinate Bench of the Tribunal in the case of Messee Dusseldorf India (P) Ltd.

“We do not find any infirmity in the order of the CIT(A) on this issue. We find, the coordinate Benches of the Tribunal are consistently holding that interest paid for late deposit of the service tax is a permissible deduction,” the bench said. “Similar view has been taken in various other decisions relied on by ld. Counsel for the assessee. Therefore, in view of the consistent decisions of the coordinate Benches of the Tribunal, we do not find any infirmity in the order of the CIT(A) deleting the disallowance of Rs.54,31,041/-being interest on late payment of service tax holding the same to be compensatory in nature. Accordingly, the order of the CIT(A) is upheld and the grounds raised by the Revenue is dismissed,” the Bench added.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2021 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting