https://www.taxtmi.com/caselaws?id=20401 Interest payable on arrears of sales tax under a statutory instalment scheme was treated as an accretion to the tax liability, not as a penalty for breach of law. Applying the business expenditure test under section 37(1) of the Income-tax Act, the High Court noted that such interest arose because payment of tax was deferred by instalments and remained a statutory liability linked to business operations. It was therefore regarded as expenditure laid out wholly and exclusively for the purposes of business, and the deduction was allowed in favour of the assessee. en-us Wed, 22 Jan 1992 00:00:00 +0530 Fri, 13 Nov 2009 16:52:24 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=20401 Interest payable on arrears of sales tax under a statutory instalment scheme was treated as an accretion to the tax liability, not as a penalty for breach of law. Applying the business expenditure test under section 37(1) of the Income-tax Act, the High Court noted that such interest arose because payment of tax was deferred by instalments and remained a statutory liability linked to business operations. It was therefore regarded as expenditure laid out wholly and exclusively for the purposes of business, and the deduction was allowed in favour of the assessee. Case-Laws Income Tax Wed, 22 Jan 1992 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=20401