CIT v. Chennai Properties & Investment Ltd.

239 ITR 435High Court1999#1476 most cited

What is CIT v. Chennai Properties & Investment Ltd. authority for?

Interest paid under section 201(1A) for delay in remitting tax deducted at source is not an allowable business expenditure and cannot be regarded as a compensatory payment. This interest takes its character from the nature of the tax levy, being a direct tax itself.

77

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2017 to 2026.

Also referred to as

CIT v. Chennai Properties & Investment Ltd. · Section 201(1A) · Section 37(1) · interest on delayed TDS · disallowance of interest · business expenditure deduction · compensatory payment · nature of levy · direct tax

Also reported as

105 Taxmann 346

Sections most often in play

Section 37(1)Section 201(1A)Section 143(3)Section 142(1)Section 69CSection 143(2)Section 144Section 250

Issues it is cited on

section 215section 256(1)interest under section 201(1a)section 256section 201(1a)section 40(a)(ii)section 201eligible businessdisallowance of interest expendituresection 21section 37(1)section 220

Judgments citing CIT v. Chennai Properties & Investment Ltd.

M/S Jindal Aluminium Limited, Bangalore vs. Deputy Commissioner of Income Tax (Ltu), Bangalore

In the result, the appeals filed by the assessee for assessment years 2013-2014 and 2015-2016 are allowed for statistical purposes and the appeal filed by the assessee for assessment year 2014-2015...

ITA 31/BANG/2019[2013-14]Status: DisposedITAT Bangalore25 Aug 2021AY 2013-14

Bench: Shri George George K, Jm & Shri B.R.Baskaran, Am

For Appellant: Smt.K.Soumya, AdvocateFor Respondent: SmtH.Kabila, Addl.CIT-DR
Section 244ASection 80I

…in the case of Bharat Commerce & Industry v CIT (1998) 230 ITR 733 held that interest for late payment of direct taxes is not deductible. Similar decision was rendered by the Hon'ble Madras High Court in the case of CIT vs Chennai Properties & Investments Ltd 239 ITR 435. Therefore, Rs.24,644 is added back to the total income of the assessee.” 5.1 The view taken by the Assessing Officer was confirmed by the CIT(A). 7 ITA Nos.31-33/Bang/2019. M/s.Jindal Aluminium Limited. 5.2 Aggrieved, the assessee has raised this issue before the Tribunal. 5.3 We have heard rival submissions and perused the material on record.…

Hari Machines Ltd., New Delhi vs. DCIT, New Delhi

The appeal is dismissed

ITA 213/DEL/2017[2012-13]Status: DisposedITAT Delhi03 Aug 2021AY 2012-13

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing) Hari Machines Ltd, Vs. Dcit, 4, Scindia House, Connaught Circle-11(1), Place, New Delhi New Delhi Pan: Aaach0868C (Appellant) (Respondent)

For Appellant: NoneFor Respondent: Ms. Anima Barnwal, Sr. DR
Section 143(3)Section 234BSection 37(1)

…ances of Rs. 1,28,233/- on account of interest paid for late deposit of TDS. This issue clearly covered against the assessee by the decision of the Hon’ble Madras High Court in case of Commissioner Of Income-Tax vs Chennai Properties dated 20 April, 1998 1999 239 ITR 435 Mad where in it has been held that :- 2. The assessee had, in the course of assessment proceedings for the assessment year 1981-82, claimed deduction of Rs. 10,542 which amount had been paid by it to the Income-tax Department as interest under Section 201(1A) of the Income-tax Act, 1961. The claim so made was rejected by the Income-tax Officer a…

Hari Machines Ltd., New Delhi vs. DCIT, Circle-11(1), New Delhi

In the result ground number 3-4 are allowed with above directions

ITA 6948/DEL/2017[2014-15]Status: DisposedITAT Delhi14 Jul 2021AY 2014-15

Bench: Shri Sudhanshu Srivastava & Shri Prashant Maharishi(Through Video Conferencing) Hari Machines Ltd, Vs. Dcit, 4, Scindia House, Connaught Circle-11(1), Place, New Delhi New Delhi Pan: Aaach0868C (Appellant) (Respondent)

For Appellant: NoneFor Respondent: Ms. Anima, Sr. DR
Section 143(3)Section 30Section 37(1)

…deductible expenditure stating that it was paid on behalf of the deductees therefore, it is not an liability of the Assessee hence, it is not a tax liability and only compensatory in nature. The ld AO relied upon the decision of the Hon’ble Madras High Court 239 ITR 435 as well as decision of the Hon’ble Supreme Court in 230 ITR 733 and the decision of the ld CIT(A) in Assessee’s own case for Assessment Year 2012-13 confirmed disallowances of the above payment. The ld CIT(A) also confirmed the above disallowances. 7. On carefully consideration of the issue we find that the Assessee has deposited the tax deducted…

Mach Aero Components Private Limited, Bengaluru vs. Principal Commissioner of Income Tax, Range-4, Bengaluru

In the result, the appeal by the assessee is dismissed as withdrawn

ITA 2022/BANG/2019[2015-16]Status: DisposedITAT Bangalore25 Jun 2021AY 2015-16

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2015-16

For Appellant: Shri K.P. Srinivas, CAFor Respondent: Shri Muzaffar Hussain, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 195Section 195ASection 201Section 263Section 36(1)(iii)Section 37Section 40A(2)(b)

…Commerce & Industries Ltd. v. CIT (239 ITR 733) (SC) . 13. In respect of interest u/s 201(1A) of Rs.2,65,638 also the assessee submitted that the same is compensatory in nature and allowable u/s 37 of the I.T. Act. In the case of CIT vs Chennai Properties ( 239 ITR 435) it was held that the amount required to be deducted is the amount payable as income-tax. The interest paid for the period of delay takes colour from the nature of the principal amount required to be paid. The principal amount here would be the income-tax and the interest payable for delayed payment is the consequence of failure to pay the tax an…

Iris Associates Pvt. Ltd., New Delhi vs. Addl.CIT, Special Range- 4, New Delhi

The appeal of the assessee stands dismissed

ITA 7548/DEL/2017[2014-15]Status: DisposedITAT Delhi21 Jun 2021AY 2014-15

Bench: The Assessing

…on unpaid TDS liability and, therefore, the same was not allowable for deduction from the income of the assessee. The Ld. CIT-DR also placed reliance on the judgment of the Hon’ble Madras High Court in the case of CIT vs. Chennai Properties Ltd. reported in 239 ITR 435 (Madras) and the case of Ferro Alloys Corporation vs. CIT reported in [1992] 196 ITR 406 (Bombay). The Ld. CIT-DR emphasized that the default in payment of statutory liabilities always has penal consequences and not compensatory consequences and, therefore, the appeal of the assessee deserved to be dismissed. 5.0 We have heard the rival sub…

New Modern Bazaar Departmental Store Pvt. Ltd., New Delhi vs. ITO, Ward- 31(1), New Delhi

In the result, appeal of the assessee is dismissed

ITA 590/DEL/2018[2014-15]Status: DisposedITAT Delhi08 Apr 2021AY 2014-15

Bench: Shri Amit Shuklaa N D Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: N O N EFor Respondent: Shri S. S. Negi, Sr. DR
Section 143(3)Section 201Section 37Section 37(1)

…that the above interest on late payment of TDS has rightly been disallowed. 7. We have carefully considered the rival contentions. The above issue has already been considered by Hon’ble Madras High Court in CIT Vs. Chennai Properties & Investment Ltd. (1999) 239 ITR 435 (Mad.) wherein it has been held that interest under Section 201(1A) of the Act paid by the assessee does not assume the character of business expenditure and also cannot be regarded as compensatory payment. The above decision of the Hon’ble Madras High Court has also been dealt with exclusively by the various benches of the ITAT , specifically in…

M/S Johnson Watch Company Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed

ITA 1719/DEL/2017[2012-13]Status: DisposedITAT Delhi12 Mar 2021AY 2012-13

Bench: Sh. K. N. Charydr. B. R. R. Kumar(Through Video Conferencing) Ita No. 1719/Del/2017 : Asstt. Year : 2012-13 M/S Johnson Watch Company Vs Deputy Commissioner Of Income Pvt. Ltd., L-21, Connaught Tax, Circle-13(2), Place, New Delhi-110001 New Delhi (Appellant) (Respondent) Pan No. Aabcj9807G Assessee By : Sh. Tilak Talwar, Adv. Revenue By : Sh. Sohail Malik, Sr. Dr Date Of Hearing: 24.02.2021 Date Of Pronouncement: 12.03.2021

For Appellant: Sh. Tilak Talwar, AdvFor Respondent: Sh. Sohail Malik, Sr. DR
Section 40

…in Form 26AS to the Assessing Officer to claim the relief. 5. Regarding the disallowance of interest on late deposit of TDS of Rs.6,515/-, since, the decision of the ld. CIT (A) is based on the judgment in the case of Chennai Properties and Investments Ltd. 105 Taxmann 346 (Madras), we decline to interfere with the order of the ld. CIT (A). 6. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 12/03/2021. (K. N. Chary) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 12/03/2021 *Subodh*…

M/S Perfect Turners, Jaipur vs. Deputy Commissioner of Income Tax, Circle-4, Jaipur

In the result, the appeal filed by the assessee is partly allowed with

ITA 1115/JPR/2019[2016-17]Status: DisposedITAT Jaipur23 Jan 2020AY 2016-17
For Appellant: Shri S.L. Poddar, AdvocateFor Respondent: Shri K.C. Gupta, JCIT DR
Section 143(3)Section 2(24)(x)Section 36(1)(va)

…ircle – 4, Jaipur 406 (Bom) where interest payment u/s 201(1A) for failure to deduct or pay tax deducted at source was held not deductible. A Similar view has been taken by the Madras High Court in case of CIT vs. Chennai Properties & Investment Ltd., (1999) 239 ITR 435 (Mad) wherein it was held as under (Head notes): “The liability for deduction of tax arises by reason of the provisions of the Act. Under section 201, the consequence of failure to comply with the same renders that person liable to be deemed as an assessee in default with all the consequences attached thereto. The liability to pay interest on the…

M/S. Lal Exports Ltd., Delhi vs. ACIT, New Delhi

In the result, appeal of the assessee is allowed in part for statistical purpose

ITA 5859/DEL/2016[2012-13]Status: DisposedITAT Delhi13 Nov 2019AY 2012-13

Bench: Shri Prashant Maharishi & Shri K.Narasimha Chary

For Appellant: Shri Shafiq Khan, AdvocateFor Respondent: Smt. Aparna Karan, CITDR
Section 194ASection 201Section 201(1)Section 40Section 43B

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’: NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. No.5859/Del of 2016 Assessment Year: 2012-13 M/s Lal Exports Ltd. vs ACIT, Circle 15(1), Khasra No.150, Chandan Hulla, New Delhi. Delhi. PAN: AAACL9688G (Appellant) (Respondent) Assessee by: Shri Shafiq Khan, Advocate Department by: Smt. Aparna Karan, CITDR Date of Hearing: 29.08.2019 Date of Pronouncement: 13.11.2019 ORDER PER NARASIMHA K. CHARY, JM The present appeal is filed by the assessee against the order dated 2.8.2016 passed by the lea…

DCIT, New Delhi vs. M/S. Dlf Ltd., New Delhi

ITA 2749/DEL/2013[2008-09]Status: DisposedITAT Delhi27 May 2019AY 2008-09

Bench: Shri Amit Shukla & Shri L.P. Sahu

For Appellant: Shri R.S. Singhvi & Shri SatyajeetFor Respondent: Shri Puneet Rai, Adv. Special counsel
Section 10Section 142ASection 143(3)Section 14ASection 40Section 43B

…CIT(A) and we uphold the same. Hence, this ground of Revenue is dismissed.” 36. Before us, the ld. Special Counsel for the revenue submitted that there is one direct judgment of Hon'ble Madras High Court in the case of Chennai Properties and Investment Ltd., 239 ITR 435 (Mad) and submitted that now in view of this only judgment of Hon'ble High Court, in this issue, the matter should be decided against the assessee. 37. After considering the rival submissions, we find that the assessee-company has received an interest on income tax refund of Rs.30,31,199/- and such an interest was credited in the account of “int…

Dlf Ltd., New Delhi vs. Addl. CIT, New Delhi

ITA 2126/DEL/2013[2008-09]Status: DisposedITAT Delhi27 May 2019AY 2008-09

Bench: Shri Amit Shukla & Shri L.P. Sahu

For Appellant: Shri R.S. Singhvi & Shri SatyajeetFor Respondent: Shri Puneet Rai, Adv. Special counsel
Section 10Section 142ASection 143(3)Section 14ASection 40Section 43B

…CIT(A) and we uphold the same. Hence, this ground of Revenue is dismissed.” 36. Before us, the ld. Special Counsel for the revenue submitted that there is one direct judgment of Hon'ble Madras High Court in the case of Chennai Properties and Investment Ltd., 239 ITR 435 (Mad) and submitted that now in view of this only judgment of Hon'ble High Court, in this issue, the matter should be decided against the assessee. 37. After considering the rival submissions, we find that the assessee-company has received an interest on income tax refund of Rs.30,31,199/- and such an interest was credited in the account of “int…

Vidyut Metallics P.Ltd, Mumbai vs. Assistant Commissioner of Income Tax Central Circle- 38(New Central Circle-6(3), Mumbai

The appeal stands partly allowed in terms of our above order

ITA 5243/MUM/2017[2010-11]Status: DisposedITAT Mumbai19 Mar 2019AY 2010-11

Bench: Hon’Ble Shri C.N. Prasad, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ I.T.A. No.5243/Mum/2017 (िनधा"रण वष" / Assessment Year: 2010-11) & आयकरअपील सं./ I.T.A. No.5244/Mum/2017 (िनधा"रण वष" / Assessment Year: 2011-12) M/S. Vidyut Metallics Pvt.Ltd. Acit-Cc 38 बनाम/ 4Th Floor, Malhotra House [New Central Circle-6(3) 19Th Floor, Air India Building Opp. Gpo, Fort Vs. Mumbai-400 001. Nariman Point, Mumbai-21. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aabcv-3305-R (अपीलाथ"/Appellant) (""थ" / Respondent) :

For Appellant: Shri Prateek Jha and Shri Dr. Prayag Jha- Ld. ARsFor Respondent: Shri Rajiv Gobgtra - Ld.DR
Section 143(3)Section 201(1)Section 40

…1 ITA No.5243-44/Mum/2017 M/s. Vidyut Metallics Private Limited Assessment Years :2010-11 & 2011-12 आयकर अपीलीय अिधकरण “एफ” "ायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI माननीय "ी सी. एन. "साद,"ाियक सद" एवं माननीय "ी मनोज कुमार अ"वाल ,लेखा सद" के सम"। BEFORE HON’BLE SHRI C.N. PRASAD, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ I.T.A. No.5243/Mum/2017 (िनधा"रण वष" / Assessment Year: 2010-11) & आयकरअपील सं./ I.T.A. No.5244/Mum/2017 (िनधा"रण वष" / Assessment Year: 2011-12) M/s. Vidyut Metallics Pvt.Ltd. ACIT-CC 38 बनाम/ 4th Floor, Malhotra House [New Central Circle-6(3)…

M/S Teekays Interior Solutions Pvt Ltd, Bangalore vs. Commissioner of Income Tax, Bangalore

In the result, the appeal of the assessee is partly allowed

ITA 400/BANG/2017[2011-12]Status: DisposedITAT Bangalore15 Feb 2019AY 2011-12

Bench: Shri N.V.Vasudevan, Vp & Shri B.R.Baskaran, Am

For Appellant: Smt.Sheetal, AdvocateFor Respondent: Shri P.V.Pradeepkumar, Addl.CIT
Section 14ASection 40

…is allowable as deduction. 13 ITA No.400/Bang/2017. M/s.Teekays Interior Solutions Pvt.Ltd. 14. On the contrary, the Ld D.R took support of the decision rendered by Hon’ble Madras High Court in the case of CIT vs. Chennai Properties & Investments Ltd (1999)(239 ITR 435), wherein it was held that the interest paid would take the colour from the nature of Principal amount required to be paid, but not paid in time. Accordingly it was held that the interest paid on belated payment of TDS cannot be considered as compensatory in nature and accordingly held that the same is not allowable as deduction. 15. In view of…

Yogendra Khandelwal, Jaipur vs. JCIT, Jaipur

In the result, the appeal of the assessee in ITA No

ITA 735/JPR/2016[2011-12]Status: DisposedITAT Jaipur25 Sept 2018AY 2011-12
For Appellant: Shri P. C. Jain (Adv.)For Respondent: Shri J. C. Kulhari (JCIT)
Section 201Section 40

…CIT (1992) 196 ITR 406 (Bom) where interest payment u/s 201(1A) for failure to deduct or pay tax deducted at source was held not deductible. A Similar view has been taken by the Madras High Court in case of CIT vs. Chennai Properties & Investment Ltd., (1999) 239 ITR 435 (Mad) wherein it was held as under (Head notes): “The liability for deduction of tax arises by reason of the provisions of the Act. Under section 201, the consequence of failure to comply with the same renders that person liable to be deemed as an assessee in default with all the consequences attached thereto. The liability to pay interest on the…

Hta Marketing Services P. Ltd, Mumbai vs. DCIT 2(1)(2), Mumbai

ITA 2068/MUM/2017[2013-14]Status: DisposedITAT Mumbai12 Sept 2018AY 2013-14

Bench: Shri Sandeep Gosain () & Shri N.K. Pradhan () Assessment Year: 2013-14 Hta Marketing Services Dcit-2(1)(2), Aayakar Pvt. Ltd. 3Rd Floor, Peninsula Bhavan, M.K. Marg, Vs. Chambers, G.K. Marg, Mumbai-400020. Lower Parel, Mumbai- 400013. Pan No. Aaacf0692A Appellant Respondent Assessee By : Mr. Ajit C. Shah, Ar Revenue By : Mr. Sachchidanand Dube, Dr Date Of Hearing : 04/09/2018 Date Of Pronouncement : 12/09/2018

For Appellant: Mr. Ajit C. Shah, ARFor Respondent: Mr. Sachchidanand Dube, DR
Section 143(3)Section 201Section 215Section 220(2)Section 37Section 40

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H” MUMBAI BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) Assessment Year: 2013-14 HTA Marketing Services DCIT-2(1)(2), Aayakar Pvt. Ltd. 3rd floor, Peninsula Bhavan, M.K. Marg, Vs. Chambers, G.K. Marg, Mumbai-400020. Lower Parel, Mumbai- 400013. PAN No. AAACF0692A Appellant Respondent Assessee by : Mr. Ajit C. Shah, AR Revenue by : Mr. Sachchidanand Dube, DR Date of Hearing : 04/09/2018 Date of pronouncement : 12/09/2018 ORDER PER N.K. PRADHAN, AM This is an appeal filed by the assessee. The relevant assessment year is…

Allied Media Network P.Ltd, Mumbai vs. DCIT RG 7(1), Mumbai

In the result, the appeal is partly allowed

ITA 3545/MUM/2016[2011-12]Status: DisposedITAT Mumbai27 Jun 2018AY 2011-12

Bench: Shri C.N. Prasad () & Shri N.K. Pradhan () Assessment Year: 2011-12 Allied Media Network Pvt. Dcit, Range-7(1), Aayakar Ltd., P-2, Level 3, Percept Bhavan, M.K. Marg Vs. House, 22 Raghuvanshi Mumbai-400020 Estate, 11/12 Senapati Bapat Marg, Lower Parel, Mumbai-400013. Pan No. Aadcp9975H Appellant Respondent Assessee By : Mr. Pankaj Jain, Ar Revenue By : Ms. S. Padmaja, Cit(Dr) Date Of Hearing : 05/04/2018 Date Of Pronouncement: 27/06/2018

For Appellant: Mr. Pankaj Jain, ARFor Respondent: Ms. S. Padmaja, CIT(DR)
Section 143(3)Section 36(1)(iii)

…IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) Assessment Year: 2011-12 Allied Media Network Pvt. DCIT, Range-7(1), Aayakar Ltd., P-2, Level 3, Percept Bhavan, M.K. Marg Vs. House, 22 Raghuvanshi Mumbai-400020 Estate, 11/12 Senapati Bapat Marg, Lower Parel, Mumbai-400013. PAN No. AADCP9975H Appellant Respondent Assessee by : Mr. Pankaj Jain, AR Revenue by : Ms. S. Padmaja, CIT(DR) Date of Hearing : 05/04/2018 Date of pronouncement: 27/06/2018 ORDER PER N.K. PRADHAN, AM This is an appeal filed by the assessee. The…

Iljin Automotive Private Limited, Kancheepuram vs. DCIT, Chennai

In the result, the assessee’s appeal is partly allowed

ITA 467/CHNY/2017[2012-13]Status: DisposedITAT Chennai18 Sept 2017AY 2012-13

Bench: Shri Sanjay Arora & Shri Duvvuru Rl Reddy

For Appellant: Shri Milind Madhukar Bhusari, CITFor Respondent: 21.06.2017
Section 143(3)

…आयकर अपील"य अ"धकरण, ‘डी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL BENCH ‘D’, CHENNAI "ी संजय अरोड़ा, लेखा सद"य एवं "ी धु"वु" आर.एल रे"डी, "या"यक सद"य के सम" । BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER आयकर अपील सं./ITA No.467/Mds/2017 "नधा"रण वष" / Assessment Year : 2012-13 Iljin Automotive Pvt. Ltd., Dy. Commissioner of Income Tax, Plot No.B1 & B2, SIPCOT, Vs. Corporate Circle-2(2), Industrial Park, Irungattukottai, Chennai. Sriperumbudur, Kanchipuram – 602 105. [PAN: AAACI 2641E] (अपीलाथ" /Appellant) (""यथ"/Respondent) Shri Sandeep Basmar.R, Advocate अ…