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TMI Blog2022 (12) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of penalty - HELD THAT:- We find that interest paid on belated payments of service tax is not a penalty, which can be disallowed u/s. 37(1) - Therefore, we are of the considered view that the Ld. CIT(A) has erred in sustaining addition made by the AO towards interest paid on service tax. Hence, we reverse the findings of the ld. CIT(A) and direct the AO to delete addition made towards disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,03,000 /made by AO. The amount of Rs.4,03,000/- being interest paid on service tax is compensatory in nature for delay in remittance of service tax and the same is allowable expenditure under section 37(1) of Income Tax Act. 3.For these and other grounds that may be adduced at the time of hearing it is prayed that the order of the learned CIT(A) may be set aside on this ground, and the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stained the addition made towards disallowance of interest on service tax. 4. None appeared for the assessee. We have heard the Ld. DR and perused the relevant material available on record. We find that the AO has disallowed a sum of Rs. 4,03,000/- being interest on service tax relating to earlier years on the ground that the same is in the nature of penalty. We find that interest paid on belat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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