DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-06, JAIPUR vs. RAJASTHAN STATE ROAD DEVELOPMENT AND CONSTRUCTION LIMITED , JAIPUR

ITA 1920/JPR/2025Status: DisposedITAT Jaipur02 July 2026AY 2018-198 pages
AI SummaryDismissed

What were the facts?

The Revenue appealed against the deletion of disallowance of guarantee commission and interest/penalty paid on delayed GST payments. The Assessing Officer had disallowed these amounts under Section 40(a)(iib) of the Income Tax Act, 1961.

What did the Tribunal hold?

The Tribunal held that guarantee commission is a contractual and voluntary payment, not a fee or charge exclusively levied by the state government. Similarly, interest and penalty on delayed GST payments were found to be compensatory and not covered by Section 40(a)(iib).

What were the issues?

Whether guarantee commission paid by a state undertaking to the state government is a disallowable expense under Section 40(a)(iib), and whether interest and penalty on delayed GST payments are also disallowable under the same section.

Which sections of the Income-tax Act were involved?

Section 40(a)(iib),Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, “B” BENCH, JAIPUR

Before: SMT. ANNAPURNA GUPTA& SHRI UDAYAN DASGUPTA

Hearing: 29.06.2026Pronounced: 02.07.2026

Per: Smt. Annapura Gupta, Accountant Member:- The present appeal has been filed by the Revenue against the order passed by the Office of the National Faceless Appeal Centre, Delhi (hereinafter referred to as “Ld. CIT(A)”), dated 21.10.2025 under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).

P a g e | 2 Rajasthan State Road Development and Construction Ltd.

2.

The grounds of appeal raised by the Revenue are read as under:- “1. Whether on the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax Appeals has erred in law and on facts in deleting the disallowa

The order continues below.

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