Disallowance
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
10 September 2011
Can interest on EPF ,ESI & VAT be disallowed?
11 September 2011
ONLY INTEREST ON VAT IS ALLOWED.
INTEREST ON EPF AND ESIC NOT ALLOWED.
INTEREST ON EPF AND ESIC NOT ALLOWED.
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 September 2011
why is it that only for VAT it is disallowed..when all the payments are statutory??
11 September 2011
1) Interest on PF is an allowable expenditure. CIT Vs. Mysore Electrical Industries Ltd. (1992) 196 ITR 884(Kar).
2) Interest on sales tax is an allowable expenditure. Lachmandas Mathuradas Vs.CIT (2002) 254 ITR 799(SC).Same analogy can be applied to VAT also.
3) Regarding interest on ESI, principal and interest constitutes assessee's liability and hence interest element is an allowable expenditure. Kamlapat Motilal's case reported in 105 ITR 783, though delivered in an different contest, can be relied upon.
2) Interest on sales tax is an allowable expenditure. Lachmandas Mathuradas Vs.CIT (2002) 254 ITR 799(SC).Same analogy can be applied to VAT also.
3) Regarding interest on ESI, principal and interest constitutes assessee's liability and hence interest element is an allowable expenditure. Kamlapat Motilal's case reported in 105 ITR 783, though delivered in an different contest, can be relied upon.
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13 September 2011
Interest paid for discharge of any statutory liability is not allowable. If you delay in payment of Income Tax or ESIC then the same is not allowable.
The expert Mr.Chackarpani has given you the case laws for other 2 allowable interest. I agree with him
The expert Mr.Chackarpani has given you the case laws for other 2 allowable interest. I agree with him
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