The Kolkata Bench of Income Tax Appellate Tribunal (ITAT) has directed re-adjudication as the disallowance of interest on delayed Tax Deducted at Source (TDS) deposit and service tax was without bifurcation
The assessee, Apeejay Pvt. Ltd was a private limited company engaged in the business of operating business centres and letting out. It is left with the common issue for Assessment Year 2016-17 & 2017-18, regarding disallowance on account of interest on delay deposit of TDS and interest of delay payment of service tax.
The two-member Bench of Manish Borad, (Accountant Member) Sonjoy Sarma, (Judicial Member) observed that the tribunal while considering the appeal had already deleted the addition made under Section 2(22)(e) of the Income Tax Act and also deleted the disallowance made under Section 14A read with Rule 8D of Income Tax Rules, for Assessment Year 2017-18.
The Bench further observed that the issue of interest on delay deposit of TDS had been extensively dealt with by the Coordinate Bench of this Tribunal in the case of Premier Irrigation Adritec (P) Ltd. vs. ACIT, in Assessment Year: 2014-15 wherein the Tribunal had held that interest payment on delayed deposit of income tax, whether TDS or otherwise was not an allowable expenditure.
The disallowance of interest on delayed deposit of TDS was confirmed. Since the bifurcation of the alleged disallowance was not available on record, the Bench directed the Assessing Officer to carry out the necessary exercise for which the assessee should provide the related documents and then shall confirm the disallowance for the interest on delay in deposit of TDS and allow the interest paid on delay in deposit of service tax. The Bench thereby partly allowed the appeal.
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