The Delhi bench of Income Tax Appellate Tribunal (ITAT) ruled that interest paid on account of expenses on repair and maintenance of aircrafts are not allowable expenditure.
The Assessee, India Flysafe Aviation Ltd is engaged in the business of providing aircrafts on charter basis to the VVIPs, State governments, corporate houses, travel agents, etc.During the assessment proceedings AO made a disallowance of Rs.36,912/- on account of interest on TDS holding that the it is not allowable as an expenditure.
Aggrieved, the assessee filed an appeal before the CIT(A) who upheld the addition made by the AO . Therefore the assessee filed another appeal before the tribunal.
It was observed that before the AO the assessee had surrendered this amount submitting that the interest on TDS has not been disallowed in the computation of income. It is also a settled proposition of law that interest on TDS is not an allowable expenditure.
After reviewing the submissions of both parties the two-member bench Of M. Balaganesh (Accountant Member) and Anubhav Sharma, (Judicial Member) held that interest paid on account of expenses on repair and maintenance of aircrafts are not allowable expenditure.
Salil Kapoor, counsel appeared for assessee. Meenakshi Dohare, Counsel appeared for Revenue
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