2019 (12) TMI 346

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.... is contrary to law and facts and circumstances of the case. 2.1 The ld.CIT(A) erred in deleting the disallowance of expenditure on interest on delayed payment of Service Tax of Rs. 69.20.234/- even though the same is penal in nature. 2.2. The ld.CIT(A) ought to have seen that he relied decision of the Hon'ble Delhi Tribunal in the case of M/s.Messee Dusseldorf India pvt ltd., was not accepted by the Department and further appeal is not suggested only on account of low tax effect. 2.3 The ld.CIT(A) ought to have followed the decision of the Apex Court in the case of M/s.Bharat Commrce Industries Ltd.,(153 ITR 275) wherein the Apex Court held that any interest payable for default committed by the assessee in discharging his statutor....

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....R 199 (SC), directed the Assessing Officer to delete the addition of interest on delayed payment of Service Tax. Being aggrieved with the order of the ld.CIT(A), the Revenue is before us in the present appeal. 4. Before us, ld. Senior D.R placed reliance on the orders of the lower authorities and also on the decision of Delhi High Court in the case of M/s.Bharat Commerce Industries Ltd.,(153 ITR 275). 5. On the other hand, it is submitted by ld.AR that interest partakes the character of principal tax, and therefore, interest on Service Tax is allowable. Hence, it is prayed that interest may be allowed as deduction. In this connection, he relied on the decisions of Hon'ble Supreme Court in the case of Mahalakshmi Sugar Mills Co. Vs.C.I....