COMMISSIONER OF INCOME-TAX VS LUXMI DEVI SUGAR MILLS P. LTD., 1992 PTD-SUPREME-COURT-INDIA 390 (1990)

(Appeals from the judgment and order, dated May 15, 1975, of the Allahabad High Court in Income-tax Reference No.651 of 1972).

Income-tax---

----Business expenditure---Sugar mills---Cane cess and purchase tax---Interest paid on cess and tax---Allowable as business expenditure.

The interest paid by the assessee sugar mills on cane cess and purchase tax payable under the Sugarcane Purchase Tax Act, 1961 (Indian) for delayed payment of the cess and tax was allowable as business expenditure.

Mahalakshmi Sugiu, Mills Co. v. C.I.T. (1980)123 ITR 429 (SC) fol.

Dr. V. Gauri Shankar, Senior Advocate (S. Rajappa and Ms. A. Subhashini, Advocates with him) for Appellant.

Rani Chhabra, Advocate for Respondent.

ORDER

The following question arises in the present appeals:

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in disallowing the interest of Rs.46,510 and Rs.52,429 payable under the U.P. Sugarcane Purchase Tax Act, 1961, for the assessee's failure to pay the cane cess and purchase tax for the assessment years 1969-70 and 1970-71, respectively?"

The aforesaid question was answered by the High Court in favour of the assessee and against the Revenue. The view taken by the High Court is squarely covered by the decision of this Court in Mahalakshmi Sugar Mills Co. v. C.I.T. (1980) 123 ITR 429. The appeals fail and are, accordingly, dismissed. There will be no order as to costs.

M.BA./1236/T Appeals dismissed.