https://www.taxtmi.com/caselaws?id=20002 The Supreme Court held that interest paid to the Income-tax Department under section 139(8) of the Income-tax Act is not allowable as a deduction in computing total income. The court emphasized that such interest is compensatory and not a penalty but stated that any payment made due to default in discharging statutory obligations cannot be considered an allowable business expenditure. Referring to precedent cases, the court concluded that interest for delay in filing returns is not directly connected to business activities and cannot be deducted if the principal payment (income tax) is not deductible. The decision favored the Revenue, with no order as to costs. en-us Wed, 31 May 1989 00:00:00 +0530 Wed, 11 Nov 2009 11:06:18 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=20002 The Supreme Court held that interest paid to the Income-tax Department under section 139(8) of the Income-tax Act is not allowable as a deduction in computing total income. The court emphasized that such interest is compensatory and not a penalty but stated that any payment made due to default in discharging statutory obligations cannot be considered an allowable business expenditure. Referring to precedent cases, the court concluded that interest for delay in filing returns is not directly connected to business activities and cannot be deducted if the principal payment (income tax) is not deductible. The decision favored the Revenue, with no order as to costs. Case-Laws Income Tax Wed, 31 May 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=20002