1986 (3) TMI 75

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....was assessed to income-tax for the assessment year 1972-73 the accounting year ending on March 31, 1972. The assessee claimed deduction of an amount of Rs. 30,107 which was stated to have been paid on account of interest for late payment of provident fund dues in respect of a colliery owned by the assessee. The Income-tax Officer disallowed the claim on the ground that the amount paid represented ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ty of businessman. Therefore, the interest charged for late payment of such dues was not allowable as deduction in computing the income of the assessee. It was urged on behalf of the assessee that in view of the decision of the Appellate Tribunal for the assessment year 1969-70 in the case of the assessee allowing interest for late payment of cess, the assessee should be allowed a deduction on ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... default in paying the provident fund dues in time and, therefore, the same was in the nature of a penalty and was not allowable as a deduction. In support of his contention, the learned advocate cited a decision of the Allahabad High Court in CIT v. J. K. Cotton Spinning and Weaving Mills Co. [1980] 123 ITR 911 (All), where the Allahabad High Court held that the amount paid by the assessee to the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 123 ITR 429 (SC). In this case, the Supreme Court held that interest payable and levied under section 3(3) of the U.P. Sugarcane Cess Act, 1956, was a simple interest chargeable automatically in case of delay in payment of cess. Such interest was held to be part and parcel of the liability to pay cess and was an accretion to the cess payment. The Supreme Court noted that there were other provisio....