GOURI SHANKAR JAIN (HUF),KOLKATA vs. ITO,WARD-32(1)., KOLKATA

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ITA 233/KOL/2023Status: DisposedITAT Kolkata13 December 2023AY 2014-153 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the amount paid was not a penalty for an offence but interest on delayed payments to IOC Ltd., which is a normal business practice. Therefore, it is an allowable business expenditure under Section 37(1).

What were the facts?

The assessee, a HUF, debited Rs. 31,156/- as penalty paid to IOC Ltd. in its income tax return. The Assessing Officer disallowed this amount under Section 37(1) of the Income Tax Act, treating it as a penalty. The CIT(A) confirmed this disallowance.

What were the issues?

Whether interest paid on delayed payments to a supplier (IOC Ltd.) is an allowable business expenditure under Section 37(1) or a non-allowable penalty.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA

Before: DR. MANISH BORAD, HON’BLE & SHRI SONJOY SARMA, HON’BLE

For Appellant: Shri Somnath Ghosh, Advocate
Hearing: 22/11/2023Pronounced: 13/12/2023

O R D E R

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

1.

The above captioned appeal is directed at the instance of the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter the “ld. CIT(A)”) dt. 19/01/2023, passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for the Assessment Year 2014-15.

2.

The sole grievance of the assessee is that the ld. CIT(A) erred in confirming the disallowance of Rs.31,156/- u/s 37(1) of the Act treating the same as penalty given to M/s. Indian Oil Corporation Ltd. (IOC Ltd.).

3.

We have heard rival contentions and perused the record placed before us. The assessee is a HUF engaged in business. Income of Rs.15,08,400/- declared in the Income-tax return for Assessment Year 2014-15 filed on 29/11/2014. During the course of assessment

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