Saraya Sugar Mills (P.) Ltd. v. CIT

116 ITR 387High Court1979#2380 most cited

What is Saraya Sugar Mills (P.) Ltd. v. CIT authority for?

Interest on arrears of sales tax is penal in nature, not compensatory, thereby affecting its deductibility as a business expenditure under the Income Tax Act.

48

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2016 to 2026.

Also referred to as

Saraya Sugar Mills (P.) Ltd. v. CIT · 116 ITR 387 · Section 37(1) · Section 36(1)(va) · interest on sales tax arrears · penal interest · compensatory interest · deductibility of interest · business expenditure · Allahabad High Court · nature of interest payment

Sections most often in play

Section 143(3)Section 2(24)(x)Section 201(1A)Section 36(1)(va)Section 37(1)Section 37Section 127Section 142(1)

Issues it is cited on

section 226section 215section 24asection 35esection 269uasection 2(43)section 75section 14a(1)section 211section 2(28a)interest under section 201(1a)section 127(1)

Judgments citing Saraya Sugar Mills (P.) Ltd. v. CIT

DCIT, CC-1(3), Kolkata vs. M/S. Rungta Mines Ltd., Kolkata

In the result, the appeal of revenue is partly allowed for statistical purposes

ITA 1531/KOL/2017[2014-15]Status: DisposedITAT Kolkata05 Oct 2018AY 2014-15
For Appellant: Shri A. K. Tiwari, CIT, ld. DRFor Respondent: Shri Subash Agarwal, Advocate
Section 37(1)

…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 387 (All.) The learned counsel appearing for the appellant-assessee states that the said judgment of the Full Bench has been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732 (All.) (FB), wherein it has been held that interest on arrears of tax is compensatory in nature and not penal. This question h…

ACIT, CC-3(2), Kolkata vs. M/S. Narayani Sons. Pvt. Ltd., Kolkata

In the result, all the appeals of revenue are dismissed

ITA 1798/KOL/2017[2014-15]Status: DisposedITAT Kolkata21 Aug 2018AY 2014-15

Bench: "ी जे. सुधाकर रे"डी, लेखा सद"य एवं/And "ी ऐ. ट". वक", "यायीक सद"य) [Before Shri J. Sudhakar Reddy, Am & Shri A. T. Varkey, Jm]

Section 43B

…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 387 (All.) The learned counsel appearing for the appellant-assessee states that the said judgment of the Full Bench has been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732 (All.) (FB), wherein it has been held that interest on arrears of tax is compensatory in nature and not penal. This question h…

ACIT, CC-3(2), Kolkata vs. M/S. Narayani Sons. Pvt. Ltd., Kolkata

In the result, all the appeals of revenue are dismissed

ITA 1797/KOL/2017[2013-14]Status: DisposedITAT Kolkata21 Aug 2018AY 2013-14

Bench: "ी जे. सुधाकर रे"डी, लेखा सद"य एवं/And "ी ऐ. ट". वक", "यायीक सद"य) [Before Shri J. Sudhakar Reddy, Am & Shri A. T. Varkey, Jm]

Section 43B

…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 387 (All.) The learned counsel appearing for the appellant-assessee states that the said judgment of the Full Bench has been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732 (All.) (FB), wherein it has been held that interest on arrears of tax is compensatory in nature and not penal. This question h…

ACIT, CC-3(2), Kolkata vs. M/S. Narayani Sons. Pvt. Ltd., Kolkata

In the result, all the appeals of revenue are dismissed

ITA 1796/KOL/2017[2012-13]Status: DisposedITAT Kolkata21 Aug 2018AY 2012-13

Bench: "ी जे. सुधाकर रे"डी, लेखा सद"य एवं/And "ी ऐ. ट". वक", "यायीक सद"य) [Before Shri J. Sudhakar Reddy, Am & Shri A. T. Varkey, Jm]

Section 43B

…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 387 (All.) The learned counsel appearing for the appellant-assessee states that the said judgment of the Full Bench has been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732 (All.) (FB), wherein it has been held that interest on arrears of tax is compensatory in nature and not penal. This question h…

M/S Saj Food Products Pvt. Limited, Kolkata vs. DCIT, Circle-12, Kolkata

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

ITA 1887/KOL/2016[2011-12]Status: DisposedITAT Kolkata06 Apr 2018AY 2011-12

Bench: Ao As 1 Well As Before Him In The First Appellate Stage & Confirmed The Impugned Addition Made By The Ao On This Count.

For Appellant: Shri Subash Agarwal, Advocate, ld.ARFor Respondent: Shri Arindam Bhattacharya, Addl.CIT, ld. Sr.DR
Section 37(1)

…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 3 decision in Saraya Sugar Mills (P.) Ltd. v. CIT [1979] 116 ITR 387 (All.) The learned counsel appearing for the appellant-assessee states that the said judgment of the Full Bench has been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732 (All.) (FB), wherein it has been held that interest on arrears of tax is compensatory in nature and not penal. This question h…

I.T.O WD - 6(2), Kolkata. vs. M/S Axix Overseas Ltd, Kolkata

In the result, Revenue’s appeal is partly allowed

ITA 532/KOL/2013[2009-10]Status: DisposedITAT Kolkata31 Oct 2017AY 2009-10

Bench: Shri N.V.Vasudevan & Shri Waseem Ahmed

Section 143(3)Section 194A

…e laid down by Hon'ble Supreme Court in the case of Lachmandas Mathuradas vs. CIT 254 ITR 799 (SC) wherein it was held as under:- “In taking decision the High Court had placed reliance on its Full Bench's decision in Saraya Sugar Mills (P.) Ltd. v. CIT [1979] 116 ITR 387 (All.). The said judgment of the Full Bench had been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732/15 Taxman 452 (All.) (FB), wherein it had been held that interest on arrears of tax is compensatory in nature and not penal. That question had also been considered by the Supreme Court in Saraya…

Axix Overseas Ltd, Kolkata vs. ITO, Ward - 7(1), Kolkata

In the result, Revenue’s appeal is partly allowed

ITA 376/KOL/2013[2009-10]Status: DisposedITAT Kolkata31 Oct 2017AY 2009-10

Bench: Shri N.V.Vasudevan & Shri Waseem Ahmed

Section 143(3)Section 194A

…e laid down by Hon'ble Supreme Court in the case of Lachmandas Mathuradas vs. CIT 254 ITR 799 (SC) wherein it was held as under:- “In taking decision the High Court had placed reliance on its Full Bench's decision in Saraya Sugar Mills (P.) Ltd. v. CIT [1979] 116 ITR 387 (All.). The said judgment of the Full Bench had been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732/15 Taxman 452 (All.) (FB), wherein it had been held that interest on arrears of tax is compensatory in nature and not penal. That question had also been considered by the Supreme Court in Saraya…

M.J. Exports Pvt. Ltd., Mumbai vs. D.C.I.T.3(2), Mumbai

ITA 4874/MUM/2012[2007-08]Status: DisposedITAT Mumbai17 May 2016AY 2007-08

Bench: Shri Joginder Singh & Shri Ashwani Tanejaita Nos.4874 & 4937/Mum/2012 Assessment Years: 2007-08 & 2008-09 M/S M.J. Exports Pvt. Ltd. Dcit-3(2), C/O- H.N. Motiwalla & Co. Mumbai बनाम/ 508 Sharda Chambers, Vs. 33, New Marine Lines, Mumbai-400020 ("नधा"रती /Assessee) (राज"व /Revenue ) Pan. No.Aadcm7712M

Section 158A(1)Section 269USection 37Section 43B

…e decision from Hon’ble Apex Court in Mahalaxmi Sugar Mills case (supra), the following decisions were impliedly overruled on the point:- M/s M.J. Exports Pvt. Ltd. i) Vishnu Sugar Mills Ltd. vs. CIT 113 ITR 583 (Cal) ii) Saraya Sugar Mills P. Ltd. vs. CIT 116 ITR 387 (Allahabad) (FB) iii) CIT vs. L H Sugar Factories & Oil Mills Pvt. Ltd. (123 ITR 596) (Allahabad) iv) CIT vs. Lachhmandas Mathuradas 124 ITR 411 (Allahabad) 7. On the issue of interest for delayed payments reference may be made to Triveni Engineering Works Ltd. vs. CIT (1983) 144 ITR 732 (Allahabad) (FB); CIT vs. Laxmidevi Sugar Mills Pvt.…