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TMI Blog2024 (8) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... at it was levied for non-compliance of the provisions of GST Act. Assessee is required to comply the provisions of GST Act by filing the return within the stipulated time. Since the returns have not been filed within the stipulated time, the interest and fee were charged under the GST Act. As such the interest in dispute was not charged by the revenue for committing any offence which was prohibited under the provisions of GST Act. Thus, interest and late fees paid by the assessee in the given facts and circumstances is compensatory in nature which is allowable as deduction under the provisions of section 37(1) As decided in the case of ITO vs. Virtue Financial Services (P) Ltd [ 2012 (9) TMI 762 - ITAT DELHI] regarding the payment made on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such expenses are as under: S.No. Particulars Amount (Rs) Refer Page 1 Interest on delay in filling GST Return Rs. 14,00,771/- 18 to 39 2 Interest on Delay in Payment of Professional Tax Rs. 217/- 40 3 Interest on Delay in PT Payment Rs. 522/- 52 4 Interest on License Fee Rs. 3,000/- 59 5 Late Fees on Delay in Filling GST Return Rs. 8,644/- 63 2.2 In view of the above, the AO disallowed the same and added to the total income of the assessee. On appeal, the ld. CIT(A) confirmed the order of the AO. 3. Being aggrieved by the order of the ld. CIT-A, the assessee is in appeal before us. 4. The ld. AR before us submitted that the expenses in dispute have not been prohibited under the provisions of law. As such, the interest and the fee were le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under the provisions of section 37(1) of the Act. The Delhi Tribunal in the case of ITO vs. Virtue Financial Services (P) Ltd reported 33 taxmann.com 395 regarding the payment made on account of delay in submitting statutory requirement/returns held that the same are compensatory in nature and allowable as business expenditure under section 37 of the Act. the relevant finding of the Tribunal is extracted as under: Held that that payments made by the assessee on account of delay in submitting certain statutory returns were compensatory in nature and not on account of fraction of any law. These were not penal in nature. Therefore, the Commissioner (Appeals) rightly deleted the addition. 7.1 Moving further, we note that the interest on dela ..... X X X X Extracts X X X X X X X X Extracts X X X X
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