1981 (11) TMI 74

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.... as interest for the belated payment of sales tax is an allowable expenditure. 2. For the assessment year 1978-79, the assessee-company did not pay the sales tax due from it to the sales tax department within the statutory period. The sales tax department, therefore, charged interest amounting to Rs. 8,500 from the assessee. The ITO disallowed the claim of the assessee for allowing Rs. 8,500 as....

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....law. This view derives support from the decision of Mahalakshmi Sugar Mills Co. v. CIT [1980] 123 ITR 429 (SC). I am, therefore, of the opinion that the interest paid by the assessee was incidental to the carrying on of its business and the expenditure was incurred on the ground of commercial expediency. The same is, therefore, allowable as revenue expenditure under section 37 of the Act. 4. In....

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....t of late payment of sales tax is allowable as revenue expenditure. To the same effect is the view taken by the Income-tax Appellate Tribunal in Tahira Industries (I) (P.) Ltd. v. ITO [IT Appeal Nos. 2573 and 2574 (Bom.) of 1968-69] and Mrs. ABC v. ITO [IT Appeal No. 155 (Bom.) of 1975-76]. I may also refer to the following para of the order of the Tribunal in IT Appeal Nos. 3634, 3635, 3637 and 3....