2000 (11) TMI 81 - HC - Income Tax

Summary

The High Court of Calcutta confirmed that interest on late payment of municipal rates is deductible as general business expenses under section 37. The Income-tax Appellate Tribunal allowed a deduction of Rs. 65,653 for interest payable by the assessee to the Calcutta Municipal Corporation. The decision of the Assessing Officer and the Commissioner of Income-tax (Appeals) was reversed. The requirement of section 43B does not apply to municipal rates interest. The rule was discharged as confirmation would be an empty exercise. Relevant cases supporting this decision include CIT v. Padmavati Raje Cotton Mills Ltd. and Hindustan Motors Ltd.