Allowing the appeal of the assessee the Tribunal held that ,payment of interest was only compensatory in nature and would not be in nature of penalty which would be hit by Explanation to S.37(1) . Accordingly no disallowance can be made .( AY.2012-13)
Velankani Information Systems Ltd. v. DCIT (2018) 173 ITD 19/172 DTR 356/ 196 TTJ 1128 (Bang.) (Trib.)
S. 37(1) : Business expenditure–Penal interest-Service tax- Payment of interest on delayed remittances of services tax is only compensatory in nature and would not be in nature of penalty which would be hit by Explanation to S.37(1).