05 June 2010
yes it is allowed Interest paid on sales tax arrears is deductible - Interest paid by the assessee to the Sales-tax Department on arrears of sales tax is an admissible deduction under section 37(1) - Lachmandas Mathuradas v. CIT [2002] 254 ITR 799/122 Taxman 828(SC)/CIT v. Western India State Motors [1987] 167 ITR 395 (Raj.)/CIT v. Western Indian State Motors [1988] 174 ITR 116 (Raj.).
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