Mangalore Chemicals & Fertilizers Ltd. vs. ACIT

Parties Involved

Facts Summary

Mangalore Chemicals & Fertilizers Ltd. is a company in the business of manufacturing and selling fertilizers. The company filed its return of income for the assessment year 2013-14, declaring a total loss. After scrutiny, an assessment order was passed, and subsequently, a notice under section 148 of the Income Tax Act was issued due to customs duty evasion. The Customs and Central Excise Settlement Commission ordered the company to pay additional customs duty and interest for misclassification of imported goods. The Assessing Officer allowed the additional customs duty but disallowed the interest, considering it a penalty. The company appealed against this order, arguing that the interest was compensatory and allowable under section 37 of the Act.…

Legal Issues

• 1. Whether the interest paid on delayed payment of additional Customs Duty is allowable as a deduction under section 37 of the Income Tax Act?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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