M/s. Works Station Systems (P) Ltd., Bhopal V. ACIT (Central) Gwalior, Station Bhopal, Bhopal

ITA 933/Ind/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7780 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 05-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revenue expenditure; TDS
• Section: 143(3); 153A; 37(1); 37; 132; 139

Judgement Text

ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.933/IND/2019 ASSESSMENT YEAR: 2017-18 M/S. WORK STATION SYSTEMS P . LTD., GOVINDPURA, BHOPAL / VS. ACIT(CENTRAL)GWALI OR STATION AT BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AACCK6959K APPELLANT BY SHRI GAGAN TIWARI , ADV . RE VENUE BY SHRI ASHISH PORWAL , SR. DR DATE OF HEARING: 19.08.2020 DATE OF PRONOUNCEMENT: 26 .08.2020 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F THE COMMISSIONER OF INCOME TAX APPEALS [CIT(A)]-3, B HOPAL DATED 29.08.2019 PERTAINING TO THE ASSESSMENT YEAR 2017 - 18. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE DECISION IS CONTRARY TO LAW MATERIALLY INCURRED AND UNSUSTAINABLE IN LAW, HENCE THE SAME MAY KINDLY BE QUASHED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 2 AND IN LAW, THE LD. CIT(A) ERRED AND WAS NOT JUSTIF IED IN DISALLOWING INTEREST ON ENTRY TAX AMOUNTING TO RS.2 220/- U/S 37(1) OF THE INCOME TAX ACT 1961 AND THEREFORE, THE SAME BE ALLOWED AND ADDITION MADE BE DELETED. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED AND WAS NOT JUSTIF IED IN DISALLOWING CHARGES FOR DELAY IN SUPPLY AMOUNTING T O RS.50256/- U/S 37(1) OF THE INCOME TAX ACT,1961 AND THEREFORE THE SAME BE ALLOWED AND ADDITION MADE BE DELETED. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, A LTER SUBSTITUTE, MODIFY OR WITHDRAW ANY OF THE ABOVE GRO UND(S) AT THE TIME OF HEARING OF THE APPEAL. 2. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF OFFSE T PRINTING. THE COMPANY IS RUNNING A PRINTING PRESS WIT H THE HELP OF VARIOUS SOPHISTICATED AND HIGH TECH EQUIPMENT AN D PRINTING UNITS. A SEARCH ACTION WAS CARRIED OUT U/S 132 OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED AS THE ACT). THE CASE OF THE ASSESSEE WAS CENTRALIZED AND A CONSOLIDATED ASSESSMENT ORDER U/S 153A R.W.S. 143(3) OF THE ACT FOR A.YS. 2011-12 TO 2017-18 WAS PASSED VIDE ORDER DATED 28.12.2018, THEREBY FOR THE ASSESSMENT YEAR UNDE R APPEAL AN ADDITION OF RS.52,873/- WAS MADE BY THE ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 3 ASSESSING OFFICER ON ACCOUNT OF INTEREST ON TDS, INT EREST ON ENTRY TAX AND PAYMENT OF PENALTY ON DELAY IN SUPPLY OF PRINTING MATERIAL. 3. AGGRIEVED AGAINST THIS THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO ALSO SUSTAINED THE ADDITION. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS A S MADE IN THE WRITTEN SYNOPSIS. THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE ARE REPRODUCED AS UNDER: 1. THAT THE APPELLANT IS COMPANY INCORPORATED UNDER TH E PROVISION OF COMPANIES ACT, 1956 AND IS ENGAGED IN THE BUSINESS OF OFFSET PRINTING. THAT THE ASSESSEE COMP ANY IS RUNNING A PRINTING PRESS WITH THE HELP OF VARIOUS S OPHISTICATED AND HIGH TECH EQUIPMENT AD PRINTING UNITS. REGULAR RETURN U/S 139 (1) OF THE ACT WAS FILED ON 30/03/2018 DECLARIN G TO TOTAL INCOME OF RS 8,85,010/-. 2. THAT DURING THE COURSE OF ASSESSMENT THE LD ASSESSI NG OFFICER VIDE ORDER MADE AD HOC DISALLOWANCE U/S 37 (1) OF THE ACT ON EXPENDITURE CLAIMED ON ACCOUNT OF INTEREST O N DELAYED PAYMENT OF ENTRY TAX OF RS 2,220 AND SECONDLY ON A CCOUNT OF CHARGES ON DELAYED SUPPLY OF BOOKS TO M.P. TEXT BOO K CORPORATION LTD OF RS 50,256/-. THAT BEING AGGRIEVE D BY THE ORDER OF LD AO ASSESSEE FILED APPEAL BEFORE THE LD CIT(A) ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 4 WHEREIN LD CIT (A) WITHOUT CONSIDERING THE SUBMISSI ON OF ASSESSEE UPHOLD THE DISALLOWANCE U/S 37 OF THE ACT . 3. THAT BEING AGGRIEVED BY THE ORDER OF LD SUBORDINATE AUTHORITIES THE ASSESSEE HAS FILED APPEAL BEFORE YO UR LORDSHIP 4. AS SUBMITTED IN THE PRESENT CASE OF LD SUBORDINATE AUTHORITIES HAS MADE DISALLOWANCE U/S 37 OF THE ACT :- NATURE OF DISALLOWANCE AMOUNT INTEREST ON DELAYED PAYMENT OF ENTRY TAX 2,220 CHARGES ON DELAYED SUPPLY OF BOOKS TO M.P. TEXT BOOK CORPORATION LTD 50,256 5. IN GROUND NO. (1), THE OBJECTION RAISED IS IN RESPE CT TO DELAYED PAYMENT OF ENTRY TAX. 5.1 IT IS SUBMITTED THAT IN VIEW OF THE JUDGMENT OF HO NBLE SUPREME COURT IN THE CASE OF LAXMI SUGAR MILLS CO L TD VS. CIT REPORTED IN 123 ITR 429 (SC), THIS IS A DEDUCTIBLE EXPENDITURE U/S. 37(1) OF THE ACT. THE HONBLE SUPREME COURT HA S HELD AS UNDER : 5.2 IN OUR OPINION, THE INTEREST PAID UNDER S. 3(3) OF THE CESS ACT CANNOT BE DESCRIBED AS A PENALTY PAID FOR AN IN FRINGEMENT OF THE LAW. AS THAT IS THE ONLY GROUND ON WHICH THE RE VENUE RESIST THE CLAIM OF THE ASSESSEE TO A DEDUCTION OF THE INT EREST UNDER S. 10(2)(XV) OF THE INDIAN I.T. ACT, 1922, THE ASSESSE E IS ENTITLED TO SUCCEED. THERE IS NO DISPUTE THAT THE PAYMENT OF IN TEREST REPRESENTS EXPENDITURE LAID OUT WHOLLY OR EXCLUSIVE LY FOR THE PURPOSE OF THE BUSINESS. THERE IS ALSO NO DISPUTE T HAT IT IS IN THE NATURE OF REVENUE EXPENDITURE. 5.3 RELIANCE S ALSO PLACED IN CASE OF M/S NAARAAYANI SONS PVT. LIMITED, IN ITA NO. 1796-1798/KOL/2017, VIDE O RDER DATED 21.08.2018 THE HONBLE TRIBUNAL HELD THAT INTEREST EXPENSE ON LATE DEPOSIT OF VAT, SERVICE TAX, TDS ETC ARE ALLOW ABLE ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 5 EXPENDITURE UNDER SECTION 37(1) OF THE ACT. THE OBS ERVATION ARE AS UNDER : IN VIEW OF THE ABOVE JUDGEMENT, THERE REMAINS NO DO UBT THAT THE INTEREST EXPENSE ON THE DELAYED PAYMENT OF SERV ICE TAX IS ALLOWABLE DEDUCTION. THE ABOVE PRINCIPLES CAN BE AP PLIED TO THE INTEREST EXPENSES LEVIED ON ACCOUNT OF DELAYED PAYM ENT OF TDS AS IT RELATES TO THE EXPENSES CLAIMED BY THE ASSESS EE WHICH ARE SUBJECT TO THE TDS PROVISIONS. THE ASS ESSEE CLAIMS THE SPECIFIED EXPENSES OF CERTAIN AMOUNT IN ITS PROFIT & LOSS ACCOUNT AND THEREAFTER THE ASSESSEE FROM THE PAYMENT TO THE PARTY DEDUCTS CERTAIN PERCENTAGE AS SPECIFIED UNDER THE A CT AS TDS AND PAYS TO THE GOVERNMENT EXCHEQUER. THE AMOUNT OF TDS REPRESENTS THE AMOUNT OF INCOME TAX OF THE PARTY ON WHOSE BEHALF THE PAYMENT WAS DEDUCTED & PAID TO THE GOVER NMENT EXCHEQUER. THUS THE TDS AMOUNT DOES NOT REPRESENT T HE TAX OF THE ASSESSEE BUT IT IS THE TAX OF THE PARTY WHICH H AS BEEN PAID BY THE ASS ESSEE. THUS ANY DELAY IN THE PAYMENT OF TDS BY THE ASSESSEE CANNOT BE LINKED TO THE INCOME TAX OF THE ASSESSEE AND CONSEQUENTLY THE PRINCIPLES LAID DOWN BY THE HO NBLE APEX COURT IN THE CASE OF BHARAT COMMERCE INDUSTRIES LTD . VS. C1T (1998) REPORTED IN 230 1TR 733 CANNOT BE APPLIED TO THE CASE ON HAND. THUS, IN OUR CONSIDERED VIEW, THE PRINCIPLE LAID DO WN BY THE HONBLE SUPREME COURT IN THE CASE OF BHARAT COMMERC E INDUSTRIES LTD. (SUPRA) IS NOT APPLICABLE IN THE IN STANT FACTS OF THE CASE. THUS, WE HOLD THAT THE ASSESSING OFFICER IN THE INSTANT CASE HAS WRONGLY APPLIED THE PRINCIPLE LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF BHARAT COMMERCE I NDUSTRIES LTD. (SUPRA). WE ALSO FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF LACHMANDAS MATHURA (SUPRA) HAS ALLOWED THE DEDUCTION ON ACCOUNT OF INTEREST ON LATE DEPOSIT OF SALES TAX U/S 37(1) OF THE ACT. IN VIEW OF THE ABOVE, WE CONCLUDE THAT THE INTEREST EXPENSES CLAIMED BY THE ASSESSEE ON ACCOUN T OF DELAYED DEPOSIT OF SERVICE TAX AS WELL AS TDS LIABI LITY ARE ALLOWABLE EXPENSES U/S 37(1) OF THE ACT. IN THI S VIEW OF THE MATTER, WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD. C1 T(A) ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 6 AND WE UPHOLD THE SAME. HENCE, THIS GROUND OF REVEN UE IS DISMISSED. RESPECTFULLY FOLLOWING THE AFORESAID D ECISION, WE CONFIRM THE ORDER OF LD. CIT(A) AND DISMISS THE GRO UND NO. 5 OF REVENUES APPEAL FOR AY 2012-13 AND THUS THE APPEAL OF REVENUE FOR AY 2012-13 ALSO STANDS DISMISSED. 5.4 IN LIGHT OF ABOVE IT IS SUBMITTED THAT THE LD LOWER AUTHORITIES WAS NOT AT ALL JUSTIFIED IN MAKING DISA LLOWANCE OF INTEREST ON DELAYED PAYMENT OF ENTRY TAX AS IT IS A SETTLED LAW THAT PAYMENT OF INTEREST REPRESENTS EXPENDITURE LAI D OUT WHOLLY OR EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS. 6. IN GROUND NO. (2) THE OBJECTION RAISED IS IN RESPEC T TO CHARGES ON DELAYED SUPPLY OF BOOKS TO M.P. TEXT BOO K CORPORATION LTD. 6.1 IT IS ALSO SUBMITTED THAT THE CHARGES PAID FOR DELA YED SUPPLY OF BOOKS TO M.P. TEXT BOOK CORPORATION LTD. IN THE PROFIT & LOSS ACCOUNT THE ASSESSEE HAS CLAIMED DEDUCTION O F RS. 50,256 FOR THE CHARGES FOR DELAY SUPPLY OF TEXT BOO KS. THIS AMOUNT WAS PAID AS PER THE TENDER AGREEMENT CLAUSE NOS. 29 & 33. THE LEDGER ACCOUNT IS ALSO SHOWS ON DIFFERENT DATES THE DEBITS WERE MADE. THE COPY OF THE PAYMENT RELEASED BILLS OF M.P. TEXT BOOK CORPORATION CLEARLY SHOWS THAT DEDUC TIONS MADE FROM THE SUPPLY BILLS OF THE ASSESSEE. THIS PAYMENT IS ON ACCOUNT OF CONTRACTUAL OBLIGATION OF THE ASSESSEE F OR SUPPLY OF BOOKS AS PER THE TENDER TERMS AND CONDITIONS. THE PAYMENT IS NOT IN THE NATURE OF PENALTY. IT IS ALSO NOT PAID F OR ANY INFRACTION OF LAW. THE DEDUCTIONS OF RS. 50,256 MADE FROM THE SUPPLY OF BILLS ARE FULLY DEDUCTIBLE U/S 37(1) OF THE ACT. RE LIANCE IS PLACED ON CHAUDHARY HAMMER WORKS LTD., VS. DEPARTMENT OF I NCOME TAX ITA NO: 4332/DEL/2011 ITAT DELHI. TRUE COPY OF PROFIT AND LOSS & ACCOUNT AND LEDGER A CCOUNT IS MARKED AS ANNEXURE (W/1) TRUE COPY OF TENDER AGREEMENT CLAUSE NOS. 29 & 33 I S MARKED AS ANNEXURE (W/2) ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 7 IT IS SUBMITTED THAT THE EXPENDITURE HAS BEEN DISAL LOWED ON WRONG PREMISE QUOTING THE JUDGMENT OF HONBLE SUPRE ME COURT IN THE CASE OF BHARAT COMMERCE AND INDUSTRIES LTD. VS. COMMISSIONER OF INCOME TAX (1998) 98 TAXMAN 151 (SC ) WHICH DOES NOT RELATE TO THE ISSUE UNDER CONSIDERATION I. E. CHARGES ON DELAY IN SUPPLY. IN THAT CASE, THE ISSUE WAS WHETHE R THE INTEREST PAID FOR DELAYED PAYMENT FOR ADVANCE INCOM E TAX IS DEDUCTIBLE OR NOT. THUS, THE ACTION OF THE LD SUBOR DINATE AUTHORITIES IN DISALLOWING THE EXPENDITURE IS WITHO UT COGENT REASONS AND BASIS AND DESERVES TO BE QUASHED. 5. LD. SENIOR DEPARTMENTAL REPRESENTATIVE (DR), SHRI ASHISH PORWAL OPPOSED THE SUBMISSIONS AND SUPPORTED T HE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS. IT IS CONTENTION OF THE ASSESSEE THAT THE DISALLOWANCES MADE BY THE AUTHORITIES BELOW ARE NOT JUSTIFIED. IT IS SUBMITTED THAT THE EXP ENDITURE RELATED TO DEBIT MADE BY THE M.P. TEXT BOOK CORPORATIO N LTD. ON ACCOUNT OF DELAY IN SUPPLY OF BOOKS IS ALLOW ABLE EXPENDITURE U/S 37(1) OF THE ACT. THE RELIANCE WAS PL ACED ON THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 8 RENDERED IN THE CASE OF CHAUDHARY HAMMER WORKS LTD. VS. ACIT (ITANO.4332/DEL/2011) . IT IS FURTHER CONTENDED THAT DISALLOWANCE WAS MADE ON WRONG PREMISE BY RELYING ON T HE JUDGMENT OF HON'BLE SUPREME COURT RENDERED IN THE C ASE OF BHARAT COMMERCE AND INDUSTRIES LTD. VS. CIT (1998) 98 TAXMAN 151 (SC) WHICH IS NOT RELATED TO THE ISSUE IN QUESTION. I HAVE GIVEN MY THOUGHTFUL CONSIDERATION TO THE CONTENTION OF THE ASSESSEE. LD. COUNSEL FOR THE ASSES SEE HAS RELIED UPON DECISION OF THE COORDINATE BENCH IN THE CASE OF CHAUDHARY HAMMER WORKS LTD. VS. ACIT (ITANO.4332/DEL/2011) . THE COORDINATE BENCH IN PARA 5 OF THIS ORDER DECIDED THIS ISSUE BY OBSERVING AS UNDER: 5.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CAREFUL CONSIDER ATION OF THE SAME CONSIDERING THE JUDGEMENTS RELIED UPON BY THE ASSESSEE AND TAKEN INTO CONSIDERATION BY CIT(A), AND REFERRE D TO BEFORE US, WE ARE OF THE VIEW THAT THE CLAIM OF ASSESSEE H AS RIGHTLY BEEN ALLOWED BY THE CIT(A).THERE IS A DISTINCTION B ETWEEN THE PENALTY IMPOSED FOR BREACH OF LAW AND THE LIQUIDATE D DAMAGES/COMPENSATION PAID ON ACCOUNT OF LATE DELIVE RY. THE CLAUSE PERTAINING TO COST REDUCTION IN THE EVENTUAL ITY OF LATE DELIVERY IS AN ACCEPTED FACT AND SUCH CONDITIONS AR E INHERENT RISKS AND INCIDENTAL TO THE RUNNING OF BUSINESS. TH E FACTUM OF ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 9 THE OCCURRENCE OF THE EVENT FOR WHICH COST REDUCTIO N HAS OCCURRED HAS NOT BEEN DOUBTED BY THE A.O. THE CHALL ENGE POSED BY THE DEPARTMENT IS ONLY ON THE LEGAL PRINCIPLE TH AT A BREACH OF CONTRACT OF THIS NATURE IS NOT AN ALLOWABLE EXPENSE . ON CONSIDERATION OF FACTS AND JUDICIAL PRINCIPLES, WE ARE OF THE VIEW THAT THE DEPARTMENT'S GROUND DESERVES TO BE DISMISS ED. 7. I FIND THAT THE ASSESSING OFFICER HAS DISALLOWED EXPENDITURE BY RELYING ON THE JUDGMENT OF HON'BLE S UPREME COURT IN THE CASE OF BHARAT COMMERCE AND INDUSTRIES LTD . VS. CIT (SUPRA). THE ISSUE BEFORE HON'BLE SUPREME CO URT WAS REGARDING INTEREST PAID FOR DELAYED PAYMENT FOR ADVANCE TAX. HOWEVER, THE ISSUE IN PRESENT CASE IS REL ATED TO PAYMENT MADE BY THE ASSESSEE ON ACCOUNT OF DELAY IN SUPPLY OF BOOKS. THEREFORE, DISALLOWING THE ENTIRE AM OUNT BY THE ASSESSING OFFICER WAS NOT JUSTIFIED. HENCE, T HE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE RELATED TO DELA Y IN SUPPLY OF THE BOOKS. REGARDING INTEREST ON ENTRY TAX AND TDS DIVISION BENCH OF THIS TRIBUNAL IN THE CASE OF M/S ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 10 NAARAYANI SONS PVT. LTD. IN ITAN0.1796-1798/KOL/201 7, AFTER CONSIDERING THE JUDGMENT OF HON'BLE SUPREME CO URT IN THE CASE OF BHARAT COMMERCE AND INDUSTRIES LTD. VS. CIT (SUPRA) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSE E. THE RELEVANT CONTENTS OF THE SAID DECISION ARE REPRODUCED AS UNDER: IN VIEW OF THE ABOVE JUDGMENT, THERE REMAINS NO DOU BT THAT THE INTEREST EXPENSE ON THE DELAYED PAYMENT OF SERVICE TAX IS ALLOWABLE DEDUCTION. THE ABOVE PRINCIPLES CAN BE APPLIED TO THE INTEREST EXPENSES LEVIED ON ACCOUNT OF DELAYED PAYMENT OF TDS AS IT R ELATES TO THE EXPENSES CLAIMED BY THE ASSESSEE WHICH ARE SUBJECT TO THE TDS PROVISIONS. THE ASSESSEE CLAIMS THE SPECIFIED EXPEN SES OF CERTAIN AMOUNT IN ITS PROFIT & LOSS ACCOUNT AND THE REAFTER THE ASSESSEE FROM THE PAYMENT TO THE PARTY DEDUCTS CERT AIN PERCENTAGE AS SPECIFIED UNDER THE ACT AS TDS AND PA YS TO THE GOVERNMENT EXCHEQUER. THE AMOUNT OF TDS REPRESENTS THE AMOUNT OF INCOME TAX OF THE PARTY ON WHOSE BEHALF T HE PAYMENT WAS DEDUCTED & PAID TO THE GOVERNMENT EXCHEQUER. TH US THE TDS AMOUNT DOES NOT REPRESENT THE TAX OF THE ASSESS EE BUT IT IS THE TAX OF THE PARTY WHICH HAS BEEN PAID BY THE ASS ESSEE. THUS ANY DELAY IN THE PAYMENT OF TDS BY THE ASSESSEE CAN NOT BE LINKED TO THE INCOME TAX OF THE ASSESSEE AND CONSEQ UENTLY THE PRINCIPLES LAID DOWN BY THE HON'BLE APEX COURT IN T HE CASE OF BHARAT COMMERCE INDUSTRIES LTD. VS. CIT (1998) REPO RTED IN 230 ITR 733 CANNOT BE APPLIED TO THE CASE ON HAND. THUS, IN OUR CONSIDERED VIEW, THE PRINCIPLE LAID DO WN BY THE HON'BLE SUPREME COURT IN THE CASE OF BHARAT COMMERC E ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 11 INDUSTRIES LTD. (SUPRA) IS NOT APPLICABLE IN THE IN STANT FACTS OF THE CASE. THUS, WE HOLD THAT THE ASSESSING OFFICER IN THE INSTANT CASE HAS WRONGLY APPLIED THE PRINCIPLE LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF BHARAT COMMERCE INDUST RIES LTD.(SUPRA). WE ALSO FIND THAT THE HON'BLE SUPREME COURT IN THE CASE OF LACHMANDAS MATHURA (SUPRA) HAS ALLOWED THE DEDUCTION ON ACCOUNT OF INTEREST ON LATE DEPOSIT OF SALES TAX U/S 37(1) OF THE ACT. IN VIEW OF THE ABOVE, WE CONCLUDE THAT THE INTEREST EXPENSES CLAIMED BY THE ASSESSEE ON ACCOUN T OF DELAYED DEPOSIT OF SERVICE TAX AS WELL AS TDS LIABI LITY ARE ALLOWABLE EXPENSES U/S 37(1) OF THE ACT. IN THIS VI EW OF THE MATTER, WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) AND WE UPHOLD THE SAME. HENCE, THIS GROUND OF REVEN UE IS DISMISSED.' 8. RESPECTFULLY, FOLLOWING THE ABOVE DECISION OF TH E DIVISION BENCH OF THIS TRIBUNAL, I ALLOW THE GROUNDS OF APPEAL AND DIRECT AO TO DELETE THE IMPUGNED ADDITION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 .08. 2020. SD/- (KU L BHARAT) JUDICIAL MEMBER INDORE; DATED : 26/08/2020 PATEL/PS ITANO.933/2019 WORK STATION SYSTEMS P. LTD. 12 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE