ITA No.268/Coch/2024

Parties Involved

Facts Summary

This is an appeal filed by the assessee challenging the order of the NFAC/CIT(A) dated 06.02.2024 in respect of the assessment year 2018-2019. The assessee filed its return of income and thereafter its case was selected for limited scrutiny and the Assessing Officer pointed out that the assessee had not deducted TDS and paid to the department and also the AO based on the Profit & Loss account disallowed the expenses in respect of the interest and penalty payment. The assessee challenged the said order before the ld.CIT(A) on the ground that the interest and penalty amounts are nothing but the amounts paid to the suppliers for the delay in making payments and also delay in payment of sales-tax, and therefore, is an allowable expense. The assessee further submitted that they had already disallowed 30% of the interest paid u/s.40 of the Act and also claimed that the assessee had also deducted 30% of the TDS amount for not deducting the same. The ld.CIT(A) without considering the submissions had dismissed the appeal by passing a non-speaking order, and therefore, the present appeal has been filed before this Tribunal.…

Legal Issues

• 1. Whether the interest and penalty amounts paid to suppliers, banks, and sales tax department are allowable expenses?
• 2. Whether the assessee had already disallowed 30% of the interest paid under section 36 of the Act?

Judgment Outcome

Decided in favour of Assessee.

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