TaxTMI 
TaxTMI 
2023 (2) TMI 687
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.... appeal: "1. The learned CIT(A) erred in confirming the disallowance of interest of Rs.3,37,96,354/- paid on account of delayed payment of custom duty on the ground that the same was disallowable in view of explanation (1) to section37(1) of the Act. 2. The learned CIT(A) failed to appreciate that the interest on delayed payment of custom duty was not a payment which was in the nature of any offence or prohibited by law and therefore, the provisions of explanation (1) to section 37(1) were not applicable and accordingly, there was no reason to disallow the claim of the assessee company. 3. The learned CIT(A) further erred in holding that interest on delayed payment on custom duty was not covered by the provisions ....
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.... under the Advance Licensing Scheme issued by the Director General of Foreign Trade (DGFT) and as per the terms and conditions of the said advance licenses, Enkei Castalloy Ltd. had to fulfill certain export obligation within the stipulated time i.e. within 24 months from the date of issue of license. The said license was later on extended to 36 months by the DGFT. Later on, by the order of Hon'ble High Court of Bombay, dated 26.02.2010, Enkei Castalloy Ltd. got demerged and two companies were formed namely: Alicon Castloy Ltd. (Demerged Company) and Enkei Wheels India Ltd. (the appellant company). After demerged, 4 Advance Authorization Licenses were transferred by the DGFT to the appellant company on 03.02.2012 and the details of whic....
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....interest debited was Rs.7,85,20,569/- out of which the assessee paid an amount of Rs. 3,37,96,354/- before the due date of filling the return of income. Accordingly, the amount of Rs.3,37,96,354/- was claimed as deduction u/s 43B.The Ld.AR submitted that it is an allowable deduction u/s 43B of the Act. He relied on following case laws : CIT v/s Andhra Sugars Ltd 367 ITR 195 CIT Vs. UP Distillary 160 ITR 0444 5. The ld.DR relied on the orders of the Lower Authorities. Findings and Discussions: 6. We have heard both the parties and perused the records. It is a fact that assessee had paid interest of Rs.3,37,96,354/- on custom duty and the same has been claimed by the assessee as deduction allowable under section 43B of the Act.....
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....ecified by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself to pay on demand an amount equal to the duty leviable, but for the exemption contained herein, on the imported materials in respect of which the conditions specified in this notification have not been complied with, together with interest at the rate of fifteen per cent. per annum from the date of clearance of the said materials :" Unquote. 9. The plain reading of the notification No. 93/2004-Cus dated 10.09.2004 explains that Government had exempted payment of Duty, Additional Duty for Import against Advance licenses provided the importer fulfills the export obligation within the specified time. 10. In the case of t....
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....f)...... * * * * shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him :" 7.1 From the plain reading of the above, it is evident that deduction claimed by the assessee in respect of any sum paid by way of tax, duty, cess, or fee, shall be allowed only in computing the income referred to in Section 28 of that previous year in which such sum is actually paid by him, irrespective of the previous year in which the liability to pay was incurred on the payment of such sum as per meth....
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....e, the interest becomes automatically payable. In this regard, we find that the Tribunal, not having considered the provisions of section 17A(2) of the Himachal Pradesh General Sales Tax Act, 1968, has committed an error in law. We also note that the computation of 18 per cent. of sales tax is based on the provisions of section 17A(2) which requires the rate of interest to be one and a half percentum per month. 8. Consequently, we answer the question in the negative, that is, in favour of the assessee and against the Revenue" Unquote. 12. In the case of Shankar Trading Co Pvt Ltd (supra) the assessee company had paid interest on Sale tax. The AO had not allowed the said interest as deduction u/s43B of the Act. However, the Hon'ble Delhi ....