1978 (11) TMI 88

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.... interest on delayed payment of sales-tax. 2. The assessee is a registered firm. For the asst. yr. 1976-77, corresponding to the previous year ended 31st March, 76, the assessee filed a return along with a profit and loss account showing net profit of Rs. 62,164. The ITO found that the assessee paid a sum of Rs. 7,769 as interest to the sales-tax Department for delay in making payment of the ad....

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.... itself begin a business expenditure, the interest payment was also part of sales-tax and was rightly allowed by the AAC. Reliance was placed on the decision of the Allahabad High Court in the case of Kamlapat Motialal(2). 4. On a careful consideration of the rival submissions, we are of the opinion that there are no merits in this appeal. The admitted facts are that the assessee not having pai....

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....yment of interest was an expenditure laid out of the purpose of the business since it was an addition to the sales-tax which itself was an admissible business expenditure. This is a view taken by the Allahabad High Court also in the case of interest paid for delay in the payment of purchase-tax which is an analogous case. The decision of the Calcutta High Court relied on by the Revenue has no appl....