ITAT allowed the appeal of the anonymous partnership assessee,...

ITAT allowed the appeal of the anonymous partnership assessee, holding that interest paid on delayed remittance of GST and VAT is compensatory rather than penal in nature and therefore deductible for income-tax purposes. The Tribunal found that the payment was made to discharge statutory liabilities and not to punish the assessee, placing it within the ambit of allowable business expenditure. Accordingly, the grounds challenging disallowance of such interest were allowed and the addition was deleted, with the assessment adjusted to reflect the deduction of interest on delayed statutory remittances.