EVEREST KANTO CYLINDER LTD ,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, CPC BENGALURU, MUMBAI

ITA 782/MUM/2024Status: DisposedITAT Mumbai20 January 2025AY 2021-22Bench: SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND MISS PADMAVATHY S. (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that interest and penalties related to tax payments and advance license obligations are allowable as business expenditure. However, the loss on the sale of assets, classified as a short-term capital loss, cannot be set off against business income.

What were the facts?

The assessee claimed deductions for penalties and interest on delayed payments of taxes and for non-fulfillment of advance license obligations. The assessee also claimed a loss on the sale of assets, which was set off against business income.

What were the issues?

Whether interest and penalties on tax defaults and license obligations are deductible business expenses, and whether loss on sale of assets can be set off against business income.

Which sections of the Income-tax Act were involved?

Section 37(1),Section 41(2),Section 50,Section 32(1)(i),Section 70(2),Section 71(3)

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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI

Before: SHRI ANIKESH BANERJEE & MISS PADMAVATHY S.

For Appellant: Shri Shekhar Gupta
For Respondent: Shri Biswanath Das CIT DR
Hearing: 02/01/2025Pronounced: 20/01/2025

PER ANIKESH BANERJEE, JM:

Instant appeal of the assessee was filed against the order of the Learned Commissioner of Income-tax Addl. /JCIT(A)-3, Chennai, *for brevity, ‘Ld.CIT(A)’) passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act’), date of order 05/02/2024 for A.Y. 2021-22. The impugned order was emanated from 2 Everest Kanto Cylinder Ltd the order of theCPC, Bengaluru, passed under section 143(1) of the Act, date of order 14/12/2022. 2. The assessee has raised the following grounds of appeal:- “1.The learned CIT (Appeals) has erred in law and on the facts of the case in sustaining the disallowance of Rs. 52,34

The order continues below.

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