https://www.taxtmi.com/caselaws?id=19504 The High Court of Kerala ruled in favor of the assessee, affirming that interest paid on delayed kist amounts to the Government was compensatory and deductible as business expenditure under section 37(1) of the Income-tax Act. The court held that the interest was not penal but necessary for business purposes, distinguishing it from coercive actions for defaults. The court referenced previous cases and Supreme Court decisions to establish that interest accruing on delayed payments was compensatory, aimed at compensating for the loss due to deprivation of money use, and thus deductible. en-us Fri, 07 Oct 1994 00:00:00 +0530 Fri, 06 Nov 2009 16:17:05 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=19504 The High Court of Kerala ruled in favor of the assessee, affirming that interest paid on delayed kist amounts to the Government was compensatory and deductible as business expenditure under section 37(1) of the Income-tax Act. The court held that the interest was not penal but necessary for business purposes, distinguishing it from coercive actions for defaults. The court referenced previous cases and Supreme Court decisions to establish that interest accruing on delayed payments was compensatory, aimed at compensating for the loss due to deprivation of money use, and thus deductible. Case-Laws Income Tax Fri, 07 Oct 1994 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=19504