disallowance of expenditure

This query is : Resolved

hemlata (Querist)
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05 September 2009 whether interest paid on TDS and MVAT is disallowed as expenditure in income tax and under which section?

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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09 September 2009 NO

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.).