1988 (5) TMI 27 - HC - Income Tax

Summary

The High Court of Punjab and Haryana answered two questions referred under section 256(1) of the Income-tax Act, 1961. The court held that interest paid for non-payment of purchase tax under the U.P. Sugarcane (Purchase Tax) Act, 1961, is not a penalty but a permissible deduction. This decision was based on a previous Supreme Court judgment in Mahalakshmi Sugar Mills Co. v. CIT [1980] 123 ITR 429. No costs were awarded.