https://www.taxtmi.com/caselaws?id=24274 Interest charged under section 35A of the Assam Sales Tax Act, 1947, for delayed payment of sales tax is treated as compensatory when it merely offsets deprivation of tax money during default and does not operate as punishment for breach of law. Because the liability rises automatically on default and the Act separately provides a penalty for distinct defaults, the interest forms part of the sales tax liability rather than a penal impost. On that basis, and since sales tax itself is deductible, the interest paid under section 35A is also allowable as a deduction under section 37 of the Income-tax Act, 1961. en-us Fri, 20 Jan 1989 00:00:00 +0530 Tue, 19 Jan 2010 10:11:04 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=24274 Interest charged under section 35A of the Assam Sales Tax Act, 1947, for delayed payment of sales tax is treated as compensatory when it merely offsets deprivation of tax money during default and does not operate as punishment for breach of law. Because the liability rises automatically on default and the Act separately provides a penalty for distinct defaults, the interest forms part of the sales tax liability rather than a penal impost. On that basis, and since sales tax itself is deductible, the interest paid under section 35A is also allowable as a deduction under section 37 of the Income-tax Act, 1961. Case-Laws Income Tax Fri, 20 Jan 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=24274