Lachmandas Mathura v. CIT

254 ITR 799Supreme Court of India2002#885 most cited

What is Lachmandas Mathura v. CIT authority for?

Interest paid on delayed payment of statutory dues, such as sales tax, service tax, TDS, and GST, is compensatory in nature rather than penal. Consequently, such interest is an allowable deduction in computing business profits.

119

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2010 to 2026.

Also referred to as

Lachmandas Mathura v. CIT · 254 ITR 799 · Section 37(1) · interest on delayed payment · statutory dues · compensatory interest · penal interest · allowable deduction · business expenditure · sales tax interest · service tax interest · TDS interest · GST interest

Sections most often in play

Section 143(3)Section 37(1)Section 132Section 36(1)(iii)Section 143(2)Section 153ASection 1961Section 201(1A)

Issues it is cited on

section 215section 226section 2(43)explanation to section 37section 40(a)(ii)section 2(28a)section 14a(1)statutory duessection 211interest under section 201(1a)prohibited by lawsection 21

Judgments citing Lachmandas Mathura v. CIT

Icici Home Finance Company Ltd, Mumbai vs. Addl CIT 10(1), Mumbai

In the result the appeal of the revenue stand dismissed and the appeal of the assessee is partly allowed

ITA 5949/MUM/2013[2010-11]Status: DisposedITAT Mumbai31 May 2023AY 2010-11
Section 14ASection 201Section 250Section 36(1)(viii)Section 37(1)Section 40Section 43A

…THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER I.T.A. No. 5949/Mum/2013 (A.Y. 2010-11) ICICI Home Finance Com. Vs. ACIT 10(1) Ltd. 4th Floor, Aayakar 7th floor, West wing, South Bhawan, Tower, ICICI Bank Towers, Mumbai 400021 BKC, Bandra(E) Mumbai-400051 PAN AAACI6285N (Appellant) (Respondent) I.T.A. No. 5906/Mum/2013 (A.Y. 2010-11) ACIT 10(1) Vs. ICICI Home Finance Com. 4th Floor, Aayakar Ltd. Bhawan, 7th floor, West wing, Mumbai 400021 South Tower, ICICI Bank Towers, BKC, Bandra(E) Mumbai-400051 PAN AAACI6285N (Appellant) (Responden…

DCIT 10(1), Mumbai vs. Icici Home Finance Co. Ltd, Mumbai

In the result the appeal of the revenue stand dismissed and the appeal of the assessee is partly allowed

ITA 5906/MUM/2013[2010-11]Status: DisposedITAT Mumbai31 May 2023AY 2010-11
Section 14ASection 201Section 250Section 36(1)(viii)Section 37(1)Section 40Section 43A

…THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER I.T.A. No. 5949/Mum/2013 (A.Y. 2010-11) ICICI Home Finance Com. Vs. ACIT 10(1) Ltd. 4th Floor, Aayakar 7th floor, West wing, South Bhawan, Tower, ICICI Bank Towers, Mumbai 400021 BKC, Bandra(E) Mumbai-400051 PAN AAACI6285N (Appellant) (Respondent) I.T.A. No. 5906/Mum/2013 (A.Y. 2010-11) ACIT 10(1) Vs. ICICI Home Finance Com. 4th Floor, Aayakar Ltd. Bhawan, 7th floor, West wing, Mumbai 400021 South Tower, ICICI Bank Towers, BKC, Bandra(E) Mumbai-400051 PAN AAACI6285N (Appellant) (Responden…

Delhi Cargo Service Center, New Delhi vs. ACIT, Circle-7(1), New Delhi

In the result, appeal of the assessee is allowed

ITA 9833/DEL/2019[2015-16]Status: DisposedITAT Delhi24 Mar 2023AY 2015-16

Bench: Shri Shamim Yahya & Ms. Astha Chandraasstt. Year: 2015-16

For Appellant: Shri Sarabjeet Singh, EmployeeFor Respondent: Shri T. James Singson, CIT,DR
Section 143(2)Section 143(3)Section 144Section 144CSection 144C(1)Section 144C(13)Section 144C(2)Section 271Section 37(1)Section 43B

…) of the Act. 6. The Ld. AR submitted that the liability for interest incurred by the assessee is compensatory in nature and thus is admissible as business expenditure. He relied on the decision of the Hon’ble Supreme Court in 3 Lachmandas Mathuradas vs. CIT 254 ITR 799 (SC), decision of Hon’ble Madras High Court in Chennai Properties and Investment Ltd. vs. CIT 239 ITR 435 (Mad) and the decisions of Mumbai, Calcutta and Jaipur Benches of the Tribunal. 7. The Ld. DR supported the order of the Ld. AO. 8. We have heard the Ld. Representative of the parties and perused the records. The Ld. AO had proposed the imp…

Durrung Tea Estate Ltd., Kolkata vs. D.C.I.T., Circle-4(1), Kolkata

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

ITA 655/KOL/2022[2020-2021]Status: DisposedITAT Kolkata13 Mar 2023AY 2020-2021

Bench: Dr. Manish Borad & Shri Sonjoy Sarmai.T.A. No.655/Kol/2022 Assessment Year: 2020-21 Durrung Tea Estate Ltd.……….......…..…………....................……….……Appellant C/O. Jain Vinod K & Associates, 41A, A.J.C. Bose Road, Suite No.613, 6Th Floor, Kolkata-700017. [Pan: Aaecs2666P] Vs. Dcit, Circle-4(1), Kolkata......……..…............…….......................…..…..Respondent Appearances By: Shri Vinod Jain, Fca, Appeared On Behalf Of The Appellant. Shri P.P. Barman, Addl. Cit-Dr, Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : February 27, 2023 Date Of Pronouncing The Order : March 13, 2023 Order Per Manish Borad: This Appeal At The Instance Of The Assessee Pertaining To The Assessment Year (In Short “Ay”) 2020-21 Is Directed Against The Order Of The National Faceless Appeal Centre [In Short Ld. “Cit(A)”] Dated 23.09.2022. 2. The Assessee In This Appeal Has Taken The Following Grounds Of Appeal: “1. The Ld. Commissioner Of Income Tax (Appeal) Nfac Erred On Facts In Confirming The Entire Addition Of Rs.55,91,927 Disallowed By Cpc, Bangalore U/S. 143(1)(A)(Iv) Without Considering The Details & Records. 2. The Ld. Commissioner Of Income Tax (Appeal) Nfac Erred In Law Is Confirming The Computation Of Assessed Income By Cpc, Bangalore, Adding The Entire Amount Of Rs.55,91,927 U/S.36(1)(Va) To Business Income Without Applying The Provision Of Rule 8 As Applicable In Case Of

Section 143(1)(a)Section 36(1)(va)Section 37Section 37(1)

…terest expenses claimed by the assessee on account of delayed deposit of service tax are allowable expenses u/s 37(1) of the Act. In this decision, reliance was placed on the judgment of Hon’ble Apex Court in the case of Lachmandas Mathura vs. CIT reported in 254 ITR 799, wherein, the Hon’ble Apex Court held that the interest on arrears of tax is compensatory in nature and not penal. We, therefore respectfully following the decision of this Tribunal hold that the assessee is eligible to claim interest on GST at Rs. 35,595/- as an expenditure u/s 37(1) of the Act and thus the said disallowance is deleted. So far a…

Universal Energies Ltd., New Delhi vs. DCIT, Circle- 18(1), New Delhi

In the result, the appeal of the assessee stands allowed

ITA 5298/DEL/2018[2014-15]Status: DisposedITAT Delhi05 Jan 2023AY 2014-15

Bench: The Ld. Cit (A).

For Appellant: NoneFor Respondent: Shri Abhishek Kumar, Sr. DR
Section 201Section 30Section 37(1)Section 40

…aws mentioned herein above. 9. Accordingly, we are of the considered opinion that the aforesaid case laws support the case of the assessee. In brief, we may refer to the decision of Hon’ble Supreme Court in the case of Lachmandas Mathuradas vs. CIT (2002) 254 ITR 799 (SC) wherein it was held that interest on arrears or on outstanding balance of sales tax is compensatory 5 ITA No.5298/Del./2018 in nature and would be allowable as deduction in computing profits of a business. 10. Referring to the same decision, ITAT in the case of Narayani Ispat (P) Ltd in ITA No.2127/Kol/2014 for AY 2010-11 vide order dated…

M/S. Sahyog Homes Ltd, Mumbai vs. DCIT Cent. Cir 6(2), Mumbai

In the result, all the appeals are partly allowed

ITA 1922/MUM/2021[2014-15]Status: DisposedITAT Mumbai23 Dec 2022AY 2014-15

Bench: Shri Kuldip Singh () & Shri Rifaur Rahman (

Section 143(3)Section 37(1)Section 40

…expenses of the appellant and tax deduction liability and hence the expenses is related to business and an allowable deduction. In order to support the above contention, the appellant has relied upon the decision in the cases of (i) Lachmandas Mathura v. CIT 254 ITR 799 and (ii) DCIT.Circle-3(11), Kolkata vs. M/s.Narayani Ispat Pvt. Ltd. ITA No.2127/Kol/2014(Kol ITAT).” 7. Ld.AR for the assessee challenging the impugned order passed by Ld.CIT(A)’s order contended that since the interest paid on delayed payment of TDS under section 201(1A) of the Act would be compensatory in nature, thus allowable deduction and…

M/S. Sahyog Homes Ltd., Mumbai vs. DCIT Cent. Cir. 6(2), Mumbai

In the result, all the appeals are partly allowed

ITA 1921/MUM/2021[2013-14]Status: DisposedITAT Mumbai23 Dec 2022AY 2013-14

Bench: Shri Kuldip Singh () & Shri Rifaur Rahman (

Section 143(3)Section 37(1)Section 40

…expenses of the appellant and tax deduction liability and hence the expenses is related to business and an allowable deduction. In order to support the above contention, the appellant has relied upon the decision in the cases of (i) Lachmandas Mathura v. CIT 254 ITR 799 and (ii) DCIT.Circle-3(11), Kolkata vs. M/s.Narayani Ispat Pvt. Ltd. ITA No.2127/Kol/2014(Kol ITAT).” 7. Ld.AR for the assessee challenging the impugned order passed by Ld.CIT(A)’s order contended that since the interest paid on delayed payment of TDS under section 201(1A) of the Act would be compensatory in nature, thus allowable deduction and…

M/S. Sahyog Homes Ltd, Mumbai vs. ACIT -11(1) (2), Mumbai

In the result, all the appeals are partly allowed

ITA 1920/MUM/2021[2012-13]Status: DisposedITAT Mumbai23 Dec 2022AY 2012-13

Bench: Shri Kuldip Singh () & Shri Rifaur Rahman (

Section 143(3)Section 37(1)Section 40

…expenses of the appellant and tax deduction liability and hence the expenses is related to business and an allowable deduction. In order to support the above contention, the appellant has relied upon the decision in the cases of (i) Lachmandas Mathura v. CIT 254 ITR 799 and (ii) DCIT.Circle-3(11), Kolkata vs. M/s.Narayani Ispat Pvt. Ltd. ITA No.2127/Kol/2014(Kol ITAT).” 7. Ld.AR for the assessee challenging the impugned order passed by Ld.CIT(A)’s order contended that since the interest paid on delayed payment of TDS under section 201(1A) of the Act would be compensatory in nature, thus allowable deduction and…

M/S. Sahyog Homes Ltd, Mumbai vs. DCIT Cent. Cir 6(2), Mumbai

In the result, all the appeals are partly allowed

ITA 1919/MUM/2021[2012-13]Status: DisposedITAT Mumbai23 Dec 2022AY 2012-13

Bench: Shri Kuldip Singh () & Shri Rifaur Rahman (

Section 143(3)Section 37(1)Section 40

…expenses of the appellant and tax deduction liability and hence the expenses is related to business and an allowable deduction. In order to support the above contention, the appellant has relied upon the decision in the cases of (i) Lachmandas Mathura v. CIT 254 ITR 799 and (ii) DCIT.Circle-3(11), Kolkata vs. M/s.Narayani Ispat Pvt. Ltd. ITA No.2127/Kol/2014(Kol ITAT).” 7. Ld.AR for the assessee challenging the impugned order passed by Ld.CIT(A)’s order contended that since the interest paid on delayed payment of TDS under section 201(1A) of the Act would be compensatory in nature, thus allowable deduction and…

M/S. Sahyog Homes Ltd, Mumbai vs. DCIT (A) -8(3), Mumbai

In the result, all the appeals are partly allowed

ITA 1918/MUM/2021[2011-12]Status: DisposedITAT Mumbai23 Dec 2022AY 2011-12

Bench: Shri Kuldip Singh () & Shri Rifaur Rahman (

Section 143(3)Section 37(1)Section 40

…expenses of the appellant and tax deduction liability and hence the expenses is related to business and an allowable deduction. In order to support the above contention, the appellant has relied upon the decision in the cases of (i) Lachmandas Mathura v. CIT 254 ITR 799 and (ii) DCIT.Circle-3(11), Kolkata vs. M/s.Narayani Ispat Pvt. Ltd. ITA No.2127/Kol/2014(Kol ITAT).” 7. Ld.AR for the assessee challenging the impugned order passed by Ld.CIT(A)’s order contended that since the interest paid on delayed payment of TDS under section 201(1A) of the Act would be compensatory in nature, thus allowable deduction and…

Air India Ltd, Mumbai vs. DCIT 5(1), Mumbai

In the result, the appeals filed by the assessee are partly allowed for statistical purposes and the appeals filed by the revenue are dismissed

ITA 4467/MUM/2018[2010-11]Status: DisposedITAT Mumbai13 Dec 2022AY 2010-11

Bench: Shri Baskaran Br, Accountat Member & Shri Pavan Kumar Gadaleita No. 4467, 4518 & 4544/Mum/2018 (A.Y: 2010-11, 2011-12 & 2012-13)

For Appellant: Shri Madhur Agrawal.ARFor Respondent: Smt Sailaja Rai, CIT DR
Section 143(2)Section 14ASection 250Section 44A

…r India Ltd., Mumbai. delayed payment is not in the nature of penalty in the instant case on hand. The issue of delay in the payment of service tax is directly covered by the judgment of Hon’ble Apex Court in the case of Lachmandas Mathura Vs. CIT reported in 254 ITR 799 in favour of assessee. The relevant extract of the judgment is reproduced below : “The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench's…

Air India Ltd, Mumbai vs. DCIT 5(1)(1), Mumbai

In the result, the appeals filed by the assessee are partly allowed for statistical purposes and the appeals filed by the revenue are dismissed

ITA 4544/MUM/2018[2012-13]Status: DisposedITAT Mumbai07 Dec 2022AY 2012-13

Bench: Shri Baskaran Br, Accountat Member & Shri Pavan Kumar Gadaleita No. 4467, 4518 & 4544/Mum/2018 (A.Y: 2010-11, 2011-12 & 2012-13)

For Appellant: Shri Madhur Agrawal.ARFor Respondent: Smt Sailaja Rai, CIT DR
Section 143(2)Section 14ASection 250Section 44A

…r India Ltd., Mumbai. delayed payment is not in the nature of penalty in the instant case on hand. The issue of delay in the payment of service tax is directly covered by the judgment of Hon’ble Apex Court in the case of Lachmandas Mathura Vs. CIT reported in 254 ITR 799 in favour of assessee. The relevant extract of the judgment is reproduced below : “The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench's…

Air India Ltd, Mumbai vs. DCIT 5(1), Mumbai

In the result, the appeals filed by the assessee are partly allowed for statistical purposes and the appeals filed by the revenue are dismissed

ITA 4518/MUM/2018[2011-12]Status: DisposedITAT Mumbai07 Dec 2022AY 2011-12

Bench: Shri Baskaran Br, Accountat Member & Shri Pavan Kumar Gadaleita No. 4467, 4518 & 4544/Mum/2018 (A.Y: 2010-11, 2011-12 & 2012-13)

For Appellant: Shri Madhur Agrawal.ARFor Respondent: Smt Sailaja Rai, CIT DR
Section 143(2)Section 14ASection 250Section 44A

…r India Ltd., Mumbai. delayed payment is not in the nature of penalty in the instant case on hand. The issue of delay in the payment of service tax is directly covered by the judgment of Hon’ble Apex Court in the case of Lachmandas Mathura Vs. CIT reported in 254 ITR 799 in favour of assessee. The relevant extract of the judgment is reproduced below : “The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench's…

DCIT 5(1)(1), Mumbai vs. Air India Ltd, Mumbai

In the result, the appeals filed by the assessee are partly allowed for statistical purposes and the appeals filed by the revenue are dismissed

ITA 4486/MUM/2018[2010-11]Status: DisposedITAT Mumbai07 Dec 2022AY 2010-11

Bench: Shri Baskaran Br, Accountat Member & Shri Pavan Kumar Gadaleita No. 4467, 4518 & 4544/Mum/2018 (A.Y: 2010-11, 2011-12 & 2012-13)

For Appellant: Shri Madhur Agrawal.ARFor Respondent: Smt Sailaja Rai, CIT DR
Section 143(2)Section 14ASection 250Section 44A

…r India Ltd., Mumbai. delayed payment is not in the nature of penalty in the instant case on hand. The issue of delay in the payment of service tax is directly covered by the judgment of Hon’ble Apex Court in the case of Lachmandas Mathura Vs. CIT reported in 254 ITR 799 in favour of assessee. The relevant extract of the judgment is reproduced below : “The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench's…

DCIT 5(1)(1), Mumbai vs. Air India Ltd, Mumbai

In the result, the appeals filed by the assessee are partly allowed for statistical purposes and the appeals filed by the revenue are dismissed

ITA 4485/MUM/2018[2011-12]Status: DisposedITAT Mumbai07 Dec 2022AY 2011-12

Bench: Shri Baskaran Br, Accountat Member & Shri Pavan Kumar Gadaleita No. 4467, 4518 & 4544/Mum/2018 (A.Y: 2010-11, 2011-12 & 2012-13)

For Appellant: Shri Madhur Agrawal.ARFor Respondent: Smt Sailaja Rai, CIT DR
Section 143(2)Section 14ASection 250Section 44A

…r India Ltd., Mumbai. delayed payment is not in the nature of penalty in the instant case on hand. The issue of delay in the payment of service tax is directly covered by the judgment of Hon’ble Apex Court in the case of Lachmandas Mathura Vs. CIT reported in 254 ITR 799 in favour of assessee. The relevant extract of the judgment is reproduced below : “The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench's…

Deputy Commissioner of Income Tax, Circle-2(1)(2), Bangalore vs. M/S. Enzen Global Solutions Private Limited, Bangalore

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

ITA 2550/BANG/2019[2016-17]Status: DisposedITAT Bangalore19 Sept 2022AY 2016-17

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sappeal Nos. & Appellant Respondent Assessment Year

For Appellant: Shri V. Chandrashekar, AdvocateFor Respondent: Shri Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru
Section 45

…on the decision of the Kolkata bench of the ITAT in the case of DCIT vs. Narayani Ispat Pvt Ltd in ITA No.2127/KoI/2014, by order dated 30/08/2017, wherein the ITAT, following the decision of the Hon'ble Supreme Court in the case of Lachmandas Mathura vs CIT 254 ITR 799, held that interest paid for reasons of delay in remittance of Service Tax & TDS is compensatory in nature and not in the nature of Penalty. The ITAT held that remittance of TDS is not the same as payment of Income tax. ITA Nos.2332, 2550/Bang/2019 Page 24 of 31 25. The CIT(A) agreed with the contention of the assessee and held that from the de…

M/S. Enzen Global Solutions Private Limited, Bengaluru vs. Income Tax Officer, Ward- 2(1)(4), Banglaoore

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

ITA 2332/BANG/2019[2016-17]Status: DisposedITAT Bangalore19 Sept 2022AY 2016-17

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sappeal Nos. & Appellant Respondent Assessment Year

For Appellant: Shri V. Chandrashekar, AdvocateFor Respondent: Shri Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru
Section 45

…on the decision of the Kolkata bench of the ITAT in the case of DCIT vs. Narayani Ispat Pvt Ltd in ITA No.2127/KoI/2014, by order dated 30/08/2017, wherein the ITAT, following the decision of the Hon'ble Supreme Court in the case of Lachmandas Mathura vs CIT 254 ITR 799, held that interest paid for reasons of delay in remittance of Service Tax & TDS is compensatory in nature and not in the nature of Penalty. The ITAT held that remittance of TDS is not the same as payment of Income tax. ITA Nos.2332, 2550/Bang/2019 Page 24 of 31 25. The CIT(A) agreed with the contention of the assessee and held that from the de…

M/S Bhandari Health Care Pvt. Ltd., Jaipur vs. Income Tax Officer, Ward-6-3, Jaipur

ITA 689/JPR/2018[2014-15]Status: DisposedITAT Jaipur24 Aug 2022AY 2014-15
For Appellant: Sh. Sandeep JhanwarFor Respondent: Sh. Prathviraj Meena (CIT)
Section 143(3)Section 40Section 43B

…ire India (P) Ltd. Vs. DCIT in ITA No. 841/Mum/2019 where in the co- ordinate bench observed that The issue of delay in the payment of service tax is directly covered by the judgment of Hon'ble Apex Court in the case of Lachmandas Mathura v. CIT reported in 254 ITR 799 in favour of assessee. The relevant extract of the judgment is reproduced below : "The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench's…

M/S Bhandari Health Care Pvt. Ltd., Jaipur vs. Assistant Commissioner of Income Tax, Circle-6, Jaipur

ITA 688/JPR/2018[2013-14]Status: DisposedITAT Jaipur24 Aug 2022AY 2013-14
For Appellant: Sh. Sandeep JhanwarFor Respondent: Sh. Prathviraj Meena (CIT)
Section 143(3)Section 40Section 43B

…ire India (P) Ltd. Vs. DCIT in ITA No. 841/Mum/2019 where in the co- ordinate bench observed that The issue of delay in the payment of service tax is directly covered by the judgment of Hon'ble Apex Court in the case of Lachmandas Mathura v. CIT reported in 254 ITR 799 in favour of assessee. The relevant extract of the judgment is reproduced below : "The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench's…

Universal Energies Ltd., New Delhi vs. DCIT, Circle- 27(1), New Delhi

In the result, the appeal of the assessee is dismissed

ITA 2761/DEL/2018[2012-13]Status: DisposedITAT Delhi26 Jul 2022AY 2012-13

Bench: Sh. A. D. Jaindr. B. R. R. Kumar

For Appellant: Sh. Sudesh Garg, Adv. &For Respondent: Sh. K. A. Manu, Sr. DR
Section 2Section 201Section 30Section 36(1)Section 36(1)(iii)Section 37Section 37(1)Section 40

…of the business operations and the assessee has no right to utilize such monies collected from others on behalf of the government. 10. We have also gone through the Apex Court observations in this regard in the case of Lachmandas Mathura Vs. CIT reported in 254 ITR 799 are as follows: “The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the said view the High Court has placed reliance on its Full Bench’s decision in Saraya Sugar Mills (P.) Ltd. v. CIT [1979] 116 ITR 38…