1992 (1) TMI 20

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....tified in law in holding that an amount of Rs. 30,246, being interest paid on arrears of sales tax, was an allowable deduction for the assessment year 1975-76, when the liability to pay interest was statutory and was ascertainable to the assessee for the earlier years, vide Commissioner of Sales Tax's order dated October 8, 1971 ?" The assessee, a joint Hindu family firm, assessed to income-tax, claimed deduction of Rs. 30,246 for the calendar year 1974 on account of interest paid to the Sales Tax Department. This deduction was not allowed by the Income-tax Officer on two counts : (1) that the interest did not relate to the calendar year 1974, and (2) that this amount of interest was paid on belated payment of sales tax for earlier years....

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....ains of business or profession. Section 22(4A) of the Madhya Pradesh General Sales Tax Act, 1958, authorises the Commissioner of Sales Tax to permit the assessee to pay the tax demanded in instalments subject to such conditions as may be imposed. It further provides that if such instalments are granted, the dealer shall be liable to pay interest on such amount from the last date on which the tax or penalty was due to be paid in accordance with such notice of demand. The rate of interest is also specified. This clearly means that interest to be paid in terms of section 22(4A) of the Madhya Pradesh General Sales Tax Act cannot be said to be paid by way of penalty. The dealer has been afforded a facility, of course, with the leave of the Commi....