https://www.taxtmi.com/article/detailed?id=788 Interest that accrues automatically on arrears of statutory imposts (such as sales tax, cess or royalty) ordinarily constitutes a compensatory accretion to the primary liability and is deductible as a business expenditure. Assessing authorities must examine the statutory scheme and contractual provisions to determine whether a charge labelled as a penalty is in substance compensatory; where an impost is composite, authorities should bifurcate and allow deduction for the compensatory component while disallowing the penal component. en-us Tue, 18 May 2010 00:00:00 +0530 Wed, 08 Jul 2015 12:16:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/article/detailed?id=788 Interest that accrues automatically on arrears of statutory imposts (such as sales tax, cess or royalty) ordinarily constitutes a compensatory accretion to the primary liability and is deductible as a business expenditure. Assessing authorities must examine the statutory scheme and contractual provisions to determine whether a charge labelled as a penalty is in substance compensatory; where an impost is composite, authorities should bifurcate and allow deduction for the compensatory component while disallowing the penal component. Articles Income Tax Tue, 18 May 2010 00:00:00 +0530 https://www.taxtmi.com/article/detailed?id=788