Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (2) TMI 63 - ITAT HYDERABADAddition towards proportionate interest on interest free advances extended U/s. 36(1)(iii) - Assessee argued that assessee had extended interest free loan out of its non-interest-bearing fund - HELD THAT:- Claim of the Ld. AR that the assessee had extended interest free loan out of its non-interest-bearing fund is only partially correct - AO has not considered the interest free fund available with the assessee during the period of interest free loan extended to its sister concern. Needless to mention that addition cannot be made in the hands of the assessee U/s. 36(1)(iii) extending interest free loan from its non-interest-bearing fund - we hereby remit the matter back to the file of the ld. AO to compute the proportionate interest with respect to the interest-bearing fund extended to the assessee’s sister concern and thereafter pass appropriate order in accordance with law and merit based on our observations mentioned herein above. Disallowance of interest paid on late payment of TDS - penalty levied invoking the provisions of section 37(1) of the Act - HELD THAT:- Any expenditure incurred by the assessee for any purpose which is an offence or which is prohibited by law shall not be allowed to be claimed as deduction. In the case of the assessee, the late payment of TDS and the penalty levied towards the late payment of TDS cannot be treated as an offence or an act prohibited by law. These are only damages thrust on the assessee for non-payment of dues to the Revenue within the stipulated period provided under the Act. Revenue Authorities has erred in invoking the provisions of section 37(1) in the case of the assessee - we hereby direct the Ld. AO to delete the addition made in the hands of the assessee towards interest and penalty paid for late payment of TDS. Appeal of the assessee is partly allowed for statistical purposes.
|