My Question
VAT Assessment Done of Earlier Year, and CTO Find That More VAT Input Taken.
Now CTO Charged 2000 Rs. Penalty and Difference Amt 3 Lacs and 80000/- Interest on That.total 382000/-
Now Wheather This is Alloowable Expenses Under IT Act.
MR. CA (Auditor,) (537 Points)
03 September 2010My Question
VAT Assessment Done of Earlier Year, and CTO Find That More VAT Input Taken.
Now CTO Charged 2000 Rs. Penalty and Difference Amt 3 Lacs and 80000/- Interest on That.total 382000/-
Now Wheather This is Alloowable Expenses Under IT Act.
Vicky
(CA, LCS,MCOM,)
(136 Points)
Replied 03 September 2010
as per proviso to sec 37 penalty of rs 2000 will be disallowed.however,diff amt of vat and int will be allowable sub to 43B i.e. on payment basis
Vicky
(CA, LCS,MCOM,)
(136 Points)
Replied 03 September 2010
it will be allowed if the same hasnt been allowed last year....
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 03 September 2010
penalty of Rs.2000 cannot be allowed. interest of 80k also to be disallowed, coz it is an expense as a result of delay and mistake on the part of assessee
Vicky
(CA, LCS,MCOM,)
(136 Points)
Replied 03 September 2010
i think the above int is compensatory in nature and not penal,so the same can be allowed u/s 37......
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 03 September 2010
ya. i think i made a flaw. Interest is allowable. pls refer LAKSHMANDAS MATHURADAS VS CIT(1997) CASE. SORRY FOR THE FLAW. MR. RONIT IS CORRECT
CA Final
(CA Final Student)
(856 Points)
Replied 03 September 2010
penalty not allowed as deduction ........................
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