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TMI Blog2014 (3) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... e case, the Income Tax Appellate Tribunal was legally correct to hold that interest under section 215 is to be regarded as part and parcel of Income Tax liability and is deductible along with the Income Tax liability while computing chargeable profits of the company in accordance with the relevant provisions of the Companies Profits (Surtax) Act, 1964 ?" The brief facts of the case are that during the assessment years under consideration (1981-82 and 1983-84), the assessee claimed that interest charge under sections 139(8) and 215 of the Income Tax Act is excluded from the tax in the computation of chargeable profits under the Companies (Profits) Surtax Act, 1964 but the A.O. has not allowed the claim of the assessee. However, the first Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or interest after the date of notification, does not arise. In any case, interest or penalty for any action or default after the date of the notification, are not covered by the Act. A taxing statute is a code in itself for imposition of tax, penalty or interest. The remedy of a notified person who is assessed to penalty or interest, after the notified period, would be to move the appropriate authority under the taxing statute in that connection. It is also a submission of learned counsel for the Department that the difference in income tax and interest chargeable two different concepts so the tax at par with interest is not based on merit. The intention of legislature is clear and limited to the deduction of income tax only, while working ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Products (P) Ltd. Vs. CIT (1989) 180 ITR 478(Gauhati), where it was held that since any sum paid on account of tax is not deductible under section 40(a)(ii), interest paid under sections 139, 215 and 217 is also not deductible as business expenditure. Lastly, learned counsel submits that Allahabad High Court in the case of CIT Vs. Kanpur Textiles Ltd. 2005, 276 ITR, 140, held that specific provision was required to be inserted in the form of section 80V for the purpose of allowing of such interest as expenditure in the computation of profit and gains from business. But for the special provision made, interest on the capital borrowed for the payment of tax is not allowable expenditure. If that be so, on the same principle the interest pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1964 on re-production reads as under :- "Subject to the provisions contained in this Act, there shall be charged on every company for every assessment year commencing on and from the first day of April, 1964, a tax (in this Act referred to as the surtax) in respect of so much of its chargeable profits of the previous year or previous years, as the case may be, as exceed the statutory deduction, at the rate or rates specified in the Third Schedule." The Third Schedule defines the rate of surtax. In the instant case, assessee will have to pay the income tax along with interest. This liability is ascertain liability. In all the circumstances, the assessee will have to pay the tax as well as interest so, it will have to be deducted f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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