https://www.taxtmi.com/caselaws?id=246860 The High Court upheld the decisions of the CIT [A] and the Tribunal, ruling that the amount paid by the assessee towards Service tax and interest was deductible under Section 37(1) of the Income Tax Act. The Court emphasized that the expenses were incurred for business purposes and were compensatory in nature, not penal. The liability crystallized in the relevant year, and the payment was allowable as a deduction. The Court distinguished the case from penalties, affirming that the payment of interest was compensatory. Therefore, the Tax Appeal was dismissed, and the assessee's deduction was upheld. en-us Mon, 21 Apr 2014 00:00:00 +0530 Thu, 24 Apr 2014 08:03:47 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=246860 The High Court upheld the decisions of the CIT [A] and the Tribunal, ruling that the amount paid by the assessee towards Service tax and interest was deductible under Section 37(1) of the Income Tax Act. The Court emphasized that the expenses were incurred for business purposes and were compensatory in nature, not penal. The liability crystallized in the relevant year, and the payment was allowable as a deduction. The Court distinguished the case from penalties, affirming that the payment of interest was compensatory. Therefore, the Tax Appeal was dismissed, and the assessee's deduction was upheld. Case-Laws Income Tax Mon, 21 Apr 2014 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=246860