Hi
Our company has taken land on lease from NOIDA authority and as per lease deed we have to pay land cost in 16 equally half yearly installment, but due to shortage of liquidity company has defaulted in payment to NOIDA authority, authority is charging penal interest on defaulted amount.
My query is as per section 37, it will be disallow?
expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred
3 Replies
Kunal Mittal
(FINANCE OFFICER)
(580 Points)
Replied 20 October 2019
Penalty is disallowed not interest.
RAJA P M
("Do the Right Thing...!!!")
(128091 Points)
Replied 20 October 2019
Penalty and Interest on penalty is disallowed under income tax.
Dipesh Jha
(PRACTICE )
(673 Points)
Replied 20 October 2019
It is allowed inder Income tax law....becoz the said penalty is compensatory in nature
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