Prakash Cotton Mills Pvt. Ltd. v. CIT

201 ITR 684Supreme Court of India1993#766 most cited

What is Prakash Cotton Mills Pvt. Ltd. v. CIT authority for?

Compensatory interest or damages paid for a breach of contract, arising in the normal course of business, are allowable as a deduction under section 37(1) as wholly and exclusively incurred for business purposes. This principle extends to indirect taxes paid in the course of business, which are admissible as business expenditure.

133

judgments rely on this decision, according to BharatTax’s citation analysis of 367,368 Indian tax judgments — from 2010 to 2026.

Also referred to as

Prakash Cotton Mills v. CIT · Section 37(1) deduction · business expenditure · compensatory interest · damages for breach of contract · indirect tax · allowability of interest · business expediency · Supreme Court · 201 ITR 684

Sections most often in play

Section 37(1)Section 43BSection 36(1)(va)Section 143(3)Section 41(2)Section 201(1A)Section 41(1)Section 145(3)
Read the full judgment

Issues it is cited on

prohibited by lawinterest under section 201(1a)section 244asection 201(1a)business expediencyemployees contribution to pfinterest on securitiessection 41(1)section 37(1)section 41computer softwareeligible business

Judgments citing Prakash Cotton Mills Pvt. Ltd. v. CIT

Honda Motorcycle and Scooter India Pvt. Ltd., Gurgaon vs. DCIT, Circle- 2(1), Gurgaon

In the result, the appeal of the assessee is allowed

ITA 7714/DEL/2017[2012-13]Status: DisposedITAT Delhi31 Aug 2020AY 2012-13

Bench: Ms. Sushma Chowla, Vp & Shri N.K.Billaiya, Am आयकर अपील सं. / Ita No.7714/Del/2017 "नधा"रण वष" /Assessment Year 2012-13

For Appellant: Sh.Ajay Vohra, Sr.AdvFor Respondent: Sh.A.K.Saroha, CIT DR
Section 143(3)Section 32Section 37Section 37(1)Section 43A

…would be within the permissible limits and in case of irregularity, the structure has to be broken down. So, we find no merit in the stand of the Assessing Officer in this regard. We further find that the Hon’ble Supreme Court in Prakash Cotton Mills vs CIT 201 ITR 684 (SC) had observed as under:- “Therefore, whenever any statutory impost paid by an assessee by way of damages or penalty or interest is claimed as an allowable expenditure under section 37(1) of the Income Tax Act, the assessing authority is required to examine the scheme of provisions of the relevant statue providing for payment of such impost n…

Sri Saurabh Tiwary, Jamshedpur vs. ACIT Cir-3, Jamshedpur

Appeal is partly allowed in above terms

ITA 350/RAN/2018[2013-14]Status: DisposedITAT Ranchi16 Jul 2020AY 2013-14

Bench: Shri S.S, Godara, Jm & Dr. A.L. Saini, Am Assessment Year:2013-14 बनाम Sauravh Tiwary Acit, Circle-3, Jamshedpur / Banglow No.9999/287, Vijaya V/S. Garden, 5Th Phase, Baridih, Jamshedpur-831017. Pan No.Agfpt6115J अपीलाथ" /Appellant ""यथ" /Respondent ..

Section 143(3)Section 234BSection 234CSection 37(1)

…rest u/s.234C and for late payment of TDS cannot be said to be any amount paid which is an offence or prohibited by law. It is a compensatory payment for not paying tax in time. The Honourable Supreme Court in the case of Prakash Cotton Mills Pvt.Ltd. VS. CIT 201 ITR 684 (SC) has laid down the following principles with regard to allowability of a claim for deduction u/s.37(1) of the Act, with regard to fines, penalties etc., “whenever any statutory impost paid by an assessee by way of damages or penalty or interest is claimed as an allowable expenditure under section 37 (1) of the Income-tax Act, the assessing au…

The DCIT, Cochin vs. M/S.Aspinwall & Co. Ltd, Cochin

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

ITA 133/COCH/2017[2012-13]Status: DisposedITAT Cochin19 May 2020AY 2012-13

Bench: S/Shri Chandra Poojari, Am&George George K., Jm

Section 14A

…elied on by the appellant, that if the interest is compensatory in nature, the same is an allowable deduction under Section 37 of the Act (Ref; Bhai Jaspal Singh (2011) 1 SCC 39, Consolidated Coffee Ltd. - (2001) 1 SCC 278, Prakash Cotton Mills P. Ltd.(1993) (201 ITR 684), Hoshiari Lal Kewal Krishan (2009) (311 ITR 336), and Padmavathy Raje Cotton Mills Ltd., (1999) (239 ITR 355). The decisions governing the above aspect, relied on by the appellant are highly brushed aside by the first appellate authority, and further, the first appellate authority holds that it is not clear as to whether the interest in the inst…

M/S Aspinwall & Co., Ltd, Cochin vs. The ACIT, Cochin

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

ITA 128/COCH/2017[2012-13]Status: DisposedITAT Cochin19 May 2020AY 2012-13

Bench: S/Shri Chandra Poojari, Am&George George K., Jm

Section 14A

…elied on by the appellant, that if the interest is compensatory in nature, the same is an allowable deduction under Section 37 of the Act (Ref; Bhai Jaspal Singh (2011) 1 SCC 39, Consolidated Coffee Ltd. - (2001) 1 SCC 278, Prakash Cotton Mills P. Ltd.(1993) (201 ITR 684), Hoshiari Lal Kewal Krishan (2009) (311 ITR 336), and Padmavathy Raje Cotton Mills Ltd., (1999) (239 ITR 355). The decisions governing the above aspect, relied on by the appellant are highly brushed aside by the first appellate authority, and further, the first appellate authority holds that it is not clear as to whether the interest in the inst…

Aspinwall & Company Ltd, Cochin vs. The ACIT, Cochin

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

ITA 61/COCH/2015[2006-07]Status: DisposedITAT Cochin19 May 2020AY 2006-07

Bench: S/Shri Chandra Poojari, Am&George George K., Jm

Section 14A

…elied on by the appellant, that if the interest is compensatory in nature, the same is an allowable deduction under Section 37 of the Act (Ref; Bhai Jaspal Singh (2011) 1 SCC 39, Consolidated Coffee Ltd. - (2001) 1 SCC 278, Prakash Cotton Mills P. Ltd.(1993) (201 ITR 684), Hoshiari Lal Kewal Krishan (2009) (311 ITR 336), and Padmavathy Raje Cotton Mills Ltd., (1999) (239 ITR 355). The decisions governing the above aspect, relied on by the appellant are highly brushed aside by the first appellate authority, and further, the first appellate authority holds that it is not clear as to whether the interest in the inst…

Aspinwall & Company Ltd, Cochin vs. The ACIT, Cochin

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

ITA 60/COCH/2015[2006-07]Status: DisposedITAT Cochin19 May 2020AY 2006-07

Bench: S/Shri Chandra Poojari, Am&George George K., Jm

Section 14A

…elied on by the appellant, that if the interest is compensatory in nature, the same is an allowable deduction under Section 37 of the Act (Ref; Bhai Jaspal Singh (2011) 1 SCC 39, Consolidated Coffee Ltd. - (2001) 1 SCC 278, Prakash Cotton Mills P. Ltd.(1993) (201 ITR 684), Hoshiari Lal Kewal Krishan (2009) (311 ITR 336), and Padmavathy Raje Cotton Mills Ltd., (1999) (239 ITR 355). The decisions governing the above aspect, relied on by the appellant are highly brushed aside by the first appellate authority, and further, the first appellate authority holds that it is not clear as to whether the interest in the inst…

Sri Pampamaheshwar Ravindranatha, Bangalore vs. The Assistant Commissioner of Income Tax Circle-1, Bellary

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 2412/BANG/2018[2013-14]Status: DisposedITAT Bangalore11 Mar 2020AY 2013-14

Bench: Shri N.V Vasudevan, Vice- & Shri B.R.Baskaranshri Pampamaheshwar Ravindranath, Flat No.105A, Block, Terrace Garden Apartments, 2Nd Main Keb Road, Bsk 3Rd Stage, Bangalore. Pan No.Abtpr9384C Appellant Vs The Asst. Commissioner Of Income Tax, Circle-1, Bellary Respondent Assessee By : Shri Balram R Rao, Advocate Revenue By : Smt. R.Premi, Jcit Date Of Hearing : 09-03-2020 Date Of Pronouncement : 11-03-2020 O R D E R

For Appellant: Shri Balram R Rao, AdvocateFor Respondent: Smt. R.Premi, JCIT
Section 143(3)Section 37(1)

…annot be said to be a payment falling within the ambit of Explanation to Sec.37(1) of the Act. In this regard, the ld. Counsel for the assessee has placed reliance on the decision of the Hon’ble Supreme Court in the case of Prakash Cotton Mills (P)Ltd. Vs CIT 201 ITR 684(SC) and the aforesaid decision clearly lays down the proposition that when a payment by way of impost or by way of penalty or interest is purely compensatory and not penal in nature, the same should be allowed as expenditure u/s 37(1) of the Act. A payment of compensation for breach of contract can by no stretch of imagination be termed as penalt…

Dena Bank, Mumbai vs. Principal Commissioner of Income Tax 2, Mumbai

In the result, appeal filed by the assesse is allowed

ITA 2159/MUM/2018[2014-15]Status: DisposedITAT Mumbai23 Jan 2020AY 2014-15

Bench: Shri G. Manjunatha & Shri Ravish Sooddena Bank Vs. Pcit-2 Room No.344, 3Rd Floor Accounts Department Dena Bank Building Aaykar Bhawan 2Nd Floor M.K.Road 17/B, Horniman Circle Mumbai-400 020 Fort, Mumbai-400 023 Pan/Gir No.Aaacd4249B Appellant) .. Respondent)

Section 115Section 143(3)Section 263Section 36(1)(vii)Section 36(1)(viia)Section 43B

…which are in respect of criminal offence can be covered and fall tinder the purview of section 37(1). The apex court in the context of several cases has held that where penalties are compensatory in nature, the same will not be disallowed u/s, 37(1). Refer; • 201 ITR 684 (SC) Prakash Cotton Mills Pvt. Ltd. • CIT v Dhanlakshmi Bank Ltd./Catholic Syrian Bank Ltd, Kerala High Court order dated 12.11.2002 * [2014] 49 taxmann.com 565 (Punjab & HaryanaJ-Nahar Spinning Mills Ltd. v. Commissioner of Income-tax, Ludhiana * [1999] 103 Taxman 160 (Bombay) Commissioner of Income- The penalty levied for violation of KYC norm…

ITO 2(2)(3), Mumbai vs. Nishigandha Polymers P.Ltd, Mumbai

Accordingly, ground raised by the revenue are dismissed

ITA 6530/MUM/2017[2013-14]Status: DisposedITAT Mumbai10 Jan 2020AY 2013-14

Bench: Shri S. Rifaur Rahman, Am & Shri Ram Lal Negi, Jm आयकरअपीलसं./ I.T.A. No. 6530/Mum/2017 (निर्धारणवर्ा / Assessment Year: 2013-14)

For Appellant: Ms. Kavita Kaushik, DRFor Respondent: Shri Shailesh S. Shah, AR
Section 143(2)Section 40

…IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, AM & SHRI RAM LAL NEGI, JM आयकरअपीलसं./ I.T.A. No. 6530/Mum/2017 (निर्धारणवर्ा / Assessment Year: 2013-14) Nishigandha Polymers ITO 2(2)(3) Room no. 542, 5th floor, Pvt. Ltd. बिधम/ 3rd floor, Rustom Bldg, 29 Aayakar Bhavan, M. K. Vs. Veer Nariman Road, Road, Mumbai-400 020 Mumbai-400 023 स्थायीलेखासं./जीआइआरसं./PAN No. AAACN6044J (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant by : Ms. Kavita Kaushik, DR प्रत्यथीकीओरसे/Respondentby : Shri Shailesh S. Shah, AR सुनवाईकीतारीख/ : 11.11.2019 Date of Hearing घोष…

M/S. Triune Energy Pvt. Ltd., New Delhi vs. DCIT, New Delhi

ITA 95/DEL/2017[2012-13]Status: DisposedITAT Delhi17 Dec 2019AY 2012-13

Bench: Shri R.K.Panda & Shri Kuldip Singh

For Appellant: Sh. Gautam Jain, Adv. Sh. Lalit Mohan, CAFor Respondent: Shri Saras Kumar, Sr.DR
Section 2(22)(e)Section 36Section 36(1)Section 36(2)

…y Board on account of late delivery of goods was held not to be on account of infringement of law but breach of a contractual obligation and, accordingly, deductible as business expense.” 14. Hon’ble Supreme Court in case of Prakash Cotton Mills Ltd. vs. CIT 201 ITR 684 (SC) also decided the issue as to when the amount paid by assessee as interest or damages or penalty could be regarded as compensatory in character as would entitle such assessee to claim it as an allowable expenditure u/s 37(1) of the Act by returning following findings :- 9 ITA No. 95/Del./2017 “The decision of this court in Mahalakshmi Suga…

Dy. Commissioner of Income Tax, Circle-16(2), Hyderabad vs. Mylan Laboratories Limited, Hyderabad

In the result, appeal of the assessee is partly allowed

ITA 12/HYD/2019[2014-15]Status: DisposedITAT Hyderabad13 Nov 2019AY 2014-15

Bench: Smt. P. Madhavi Devi & Shri S. Rifaur Rahman

For Respondent: Sh. YVST Sai, D.R
Section 251Section 28Section 32Section 32(1)Section 37(1)Section 43(1)Section 68

…nsatory character can only be allowed as a deduction. The other portion which is attributable to its penalty nature cannot be allowed as a deduction under section 37(1) because such payment is for infraction of law [Prakash Cotton Mills P. Ltd. v. CIT, (1993) 201 ITR 684, 690-91(SC) ; Standard Batteries Ltd. v. err, (J995) 211 ITR 444, 446(SC) ; Swadeshi Cotton Mills Co. Ltd. v. err. (1998) 233 ITR 199, 202(SC) ; CIT v. Bharat Television Pvt. Ltd_, (1996) 218 ITR 173, 175, J 78(AP) ; CIT v , Hyderabad Allwyn Metal Works Ltd., (1988) 172 ITR 113. 121 (AP) . 10. In view of the above, the above, the amount of GBP 11…

Mylan Laboratories Limited, Hyderabad vs. Dy. Commissioner of Income Tax, Circle-16(2), Hyderabad

In the result, appeal of the assessee is partly allowed

ITA 2335/HYD/2018[2014-15]Status: DisposedITAT Hyderabad13 Nov 2019AY 2014-15

Bench: Smt. P. Madhavi Devi & Shri S. Rifaur Rahman

For Respondent: Sh. YVST Sai, D.R
Section 251Section 28Section 32Section 32(1)Section 37(1)Section 43(1)Section 68

…nsatory character can only be allowed as a deduction. The other portion which is attributable to its penalty nature cannot be allowed as a deduction under section 37(1) because such payment is for infraction of law [Prakash Cotton Mills P. Ltd. v. CIT, (1993) 201 ITR 684, 690-91(SC) ; Standard Batteries Ltd. v. err, (J995) 211 ITR 444, 446(SC) ; Swadeshi Cotton Mills Co. Ltd. v. err. (1998) 233 ITR 199, 202(SC) ; CIT v. Bharat Television Pvt. Ltd_, (1996) 218 ITR 173, 175, J 78(AP) ; CIT v , Hyderabad Allwyn Metal Works Ltd., (1988) 172 ITR 113. 121 (AP) . 10. In view of the above, the above, the amount of GBP 11…

Banpal Oil Chem Pvt.Ltd., Palanpur vs. The ACIT, B.K.Circle, Palanpur

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

ITA 1939/AHD/2014[2009-10]Status: DisposedITAT Ahmedabad21 Oct 2019AY 2009-10
For Appellant: Shri Tushar Hemani &For Respondent: Shri Mudit Nagpal, Sr. D.R
Section 143(3)Section 14ASection 37(1)Section 80I

…the ld. counsel contended that aassessee had paid interest of Rs. 15,88,600/- charged by the sales tax department as interest on purchase tax liability. The ld. counsel has also placed reliance on the decision of Prakash Cotton Mills Pvt. Ltd. vs. CIT (1993) 201 ITR 684 (SC) and Lachmandas Mathuradas Vs. CIT (2002) 254 ITR 799 (SC). On the other hand, ld. departmental representative has supported the order of ld. CIT(A). 10. We have heard the rival contentions and perused the material on record. With the assistance of ld. representatives, we have perused the page I.T.A No. 1939/Ahd/2014 A.Y. 2009-10 Page No 5…

DCIT, Circle-4(2), Ahmedabad vs. M/S. Deloitte Haskins and Sells, Ahmedabad

ITA 1984/AHD/2017[2014-15]Status: DisposedITAT Ahmedabad01 Oct 2019AY 2014-15

Bench: Shri Sudhanshu Srivastava & Shri Amarjit Singhay: 2013-14 Ay: 2014-15

For Appellant: Shri Percy Pardiwala, Niraj Sheth, ARsFor Respondent: Shri S.K. Dev, Sr. DR
Section 143

…ITA 1983 & 1984/AHD/2017 AY: 2013-14 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AY: 2013-14 AY: 2014-15 DCIT, vs Deloittee Haskins & Sells, Cir.4(2), A/209, A Wing, 3rd Floor, Heritage, 2nd Floor, Pratyaksh Kar Nr. Gujarat Vidyapith, Bhavan, Nr. Politechnic Off Ashram Road, Pancjararapole, Ambawadi, Usmanpura, Ahmedabad. Ahmedabad-380 015 (Appellant) (Respondent) Appellant by: Shri Percy Pardiwala, Niraj Sheth, ARs Respondent by: Shri S.K. Dev, Sr. DR Date of hearing : 28.06.2019 Date of pr…

DCIT, Circle-4(2), Ahmedabad vs. M/S. Deloitte Haskins and Sells, Ahmedabad

ITA 1983/AHD/2017[2013-14]Status: DisposedITAT Ahmedabad01 Oct 2019AY 2013-14

Bench: Shri Sudhanshu Srivastava & Shri Amarjit Singhay: 2013-14 Ay: 2014-15

For Appellant: Shri Percy Pardiwala, Niraj Sheth, ARsFor Respondent: Shri S.K. Dev, Sr. DR
Section 143

…ITA 1983 & 1984/AHD/2017 AY: 2013-14 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AY: 2013-14 AY: 2014-15 DCIT, vs Deloittee Haskins & Sells, Cir.4(2), A/209, A Wing, 3rd Floor, Heritage, 2nd Floor, Pratyaksh Kar Nr. Gujarat Vidyapith, Bhavan, Nr. Politechnic Off Ashram Road, Pancjararapole, Ambawadi, Usmanpura, Ahmedabad. Ahmedabad-380 015 (Appellant) (Respondent) Appellant by: Shri Percy Pardiwala, Niraj Sheth, ARs Respondent by: Shri S.K. Dev, Sr. DR Date of hearing : 28.06.2019 Date of pr…

ACIT, New Delhi vs. M/S. National Cable Industries, New Delhi

Appeal is allowed

ITA 4145/DEL/2015[2010-11]Status: DisposedITAT Delhi26 Sept 2019AY 2010-11

Bench: Ms Suchitra Kamble & Shri Prashant Maharishii.T.A. No. 4145/Del/2015 (A.Y. 2010-11)

Section 133ASection 143(3)Section 145(3)Section 154Section 154(3)Section 37Section 37(1)

…ital Services Ltd. vs. DCIT (2008) 108 TTJ 389 d) CIT vs. Industrial Cables India Ltd. 162 Taxman 423 (P&H HC) e) Agarwal Road Lines P. Ltd. vs. DCIT 129 TTJ 49 f) Vishwanath V. Kale vs. ITO ITA 2081/2010 (Mum) g) Prakash Cotton Mills Pvt. Ltd. vs. CIT (1993) 201 ITR 684 (SC) h) ACIT vs. Taurian Iron and Steel Co. Pvt. Ltd. (ITA No. 1613/Mum/2010) i) ITO vs. VRM Share Broking (P) Ltd. (2009) 27 SOT 469 (Mum) Thus, Explanation to section 37(1) is to be invoked only in those circumstances when there is really a breach of any law like penalty imposed under State VAT Act for non-filing of return, etc. and not in pre…

C.I.T. II Jodhpur vs. M/S Jeewan Ram Choudhary

ITA/185/2013HC Rajasthan17 Sept 2019

Bench: SANGEET LODHA,VINIT KUMAR MATHUR

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

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. No. 2126/DEL/2013 Assessment Year: 2008-09 DLF Limited, v. The Addl. Commissioner DLF Centre, (9th Floor), of Income Tax, Range- Sansad Marg, 10, New Delhi. New Delhi. TAN/PAN: AAACD 3494N (Appellant) (Respondent) I.T.A. No. 2749/DEL/2013 Assessment Year: 2008-09 The Deputy Commissioner of v. DLF Limited, Income Tax, Circle-0, DLF Centre, (9th Floor), New Delhi. Sansad Marg, New Delhi. TAN/PAN: AAACD 3494N (Appellant) (Respondent) Appellant by: Shri R.S. Singhvi…

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

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. No. 2126/DEL/2013 Assessment Year: 2008-09 DLF Limited, v. The Addl. Commissioner DLF Centre, (9th Floor), of Income Tax, Range- Sansad Marg, 10, New Delhi. New Delhi. TAN/PAN: AAACD 3494N (Appellant) (Respondent) I.T.A. No. 2749/DEL/2013 Assessment Year: 2008-09 The Deputy Commissioner of v. DLF Limited, Income Tax, Circle-0, DLF Centre, (9th Floor), New Delhi. Sansad Marg, New Delhi. TAN/PAN: AAACD 3494N (Appellant) (Respondent) Appellant by: Shri R.S. Singhvi…

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

…ubmission that the interest paid by the assessee was merely compensatory in character besides relying on the case of Mahalakshmi Sugar Mills Co. (supra) also relied on the decisions of the Apex Court in the cases of Prakash Cotton Mills (P.) Ltd. v. CIT[1993] 201 ITR 684 / 67 Taxman 546 ; Malwa Vanaspati & Chemical Co. v. CIT[1997] 225 ITR 383 and CIT v. Ahmedabad Cotton Mfg. Co. Ltd. v. CIT[1994] 205 ITR 163. In all those cases, the Court was concerned with an indirect tax payable by the assessee in the course of its business and admissible as business expenditure. Further, liability for interest which had been…