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Facts
The assessee filed an appeal against the appellate order upholding additions made by the AO. The additions pertained to the disallowance of GST expenses and late payment charges.
Held
The Tribunal held that GST paid during the year, and not claimed in earlier years, should not be disallowed under Section 43B. It also held that late payment charges paid as interest to creditors for delayed payments are allowable as business expenditure under Section 37.
Key Issues
Whether GST expenses and late payment charges are allowable as business expenditure.
Sections Cited
43B, 37
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 29.07.2025 passed by the Commissioner of Income Tax (Appeals)National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2022-23.
The assessee has raised the following grounds of appeal:
1. The Ld.CIT(A) has erred in law as well as on facts by upholding addition made by Ld.AO being disallowance of GST expense of Rs.1,86,210/- u/s.37 of the Act. Asst. Year : 2022-23 - 2–
2. The Ld.CIT(A) has erred in law as well as on facts by upholding addition made by Ld.AO being late payment charges of Rs.5,37,000/- 37 of the Act.
Disallowance of GST Expenses
From the perusal of the record, it is evident that the assessee had paid GST during the year and claimed the same as an expense under section 43B of the Act while filing the return of income. Since the amount has not been claimed in the earlier year and keeping in view the fact that the same was paid during the year under consideration, we hold that no disallowance on this account is called for.
Disallowance of Late Payment Charges
On perusal of the record, we find that the late payment charges do not pertain to any type of penalty which is statutorily disallowable. The said charges were paid as interest to various creditors for delay in payment of their dues and, therefore, the same are allowable as business expenditure under section 37 of the Act.
In the result, the appeal of the assessee is allowed.
The order is pronounced in the open Court on 19.12.2025. (SUCHITRA KAMBLE) VICE-PRESIDENT () Ahmedabad; Dated 19.12.2025 MV आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : Asst. Year : 2022-23 - 3–