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TMI Blog2020 (1) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... TED [ 2018 (7) TMI 1844 - ITAT JAIPUR] Assessee could not possibly claim that it was borrowing from the State the amounts payable by it as income-tax, and utilising the same as capitalization in its business, to contend that the interest paid for the period of delay in payment of tax amounted to a business expenditure. Therefore, the interest paid under section 201(1A) could not be allowed as business deduction. Contention regarding section 40(a)(ii) is also not tenable as the same is in context of taxes levied on the profits or gains of business and not in context of taxes by way of TDS on payments made by the assessee and in any case, the interest will partake the character of the principal which is not otherwise allowable. Respectfu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed facts that the contributions have been deposited before filing the return of income. Therefore, respectively, the following the decision of Hon ble Rajasthan High Court in case of CIT vs. JVVNL 98 DTR 105 and others, the addition made by the Assessing Officer is hereby directed to be deleted. 3. In Ground No. 2, the assessee has challenged the confirmation of addition of ₹ 34,644/- being interest on late deposit of TDS. The Assessing officer has disallowed the said claim holding that interest for late deposit of TDS is not deductible and the ld AR of the assessee has also submitted that interest on TDS was inadvertently missed from addition at the time of computation. 4. On appeal, the ld CIT(A) has record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (1A) is concerned, useful reference can be drawn to the decision of Hon ble Bombay High Court in case of Ferro Alloys Corporation Ltd vs. CIT (1992) 196 ITR 406 (Bom) where interest payment u/s 201(1A) for failure to deduct or pay tax deducted at source was held not deductible. A Similar view has been taken by the Madras High Court in case of CIT vs. Chennai Properties Investment Ltd., (1999) 239 ITR 435 (Mad) wherein it was held as under (Head notes): The liability for deduction of tax arises by reason of the provisions of the Act. Under section 201, the consequence of failure to comply with the same renders that person liable to be deemed as an assessee in default with all the consequences attached thereto. The liability to pay inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te as tax or income-tax would augment the capital of the assessee and the expenditure incurred, namely, interest paid for the period of such retention, would assume the character of business expenditure. It held that an assessee could not possibly claim that it was borrowing from the State the amounts payable by it as income-tax, and utilising the same as capitalization in its business, to contend that the interest paid for the period of delay in payment of tax amounted to a business expenditure. Therefore, the interest paid under section 201(1A) could not be allowed as business deduction. 12. The contention regarding section 40(a)(ii) is also not tenable as the same is in context of taxes levied on the profits or gains of busine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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