ITAT deleted addition on payment of interest as it was compensatory, not penal
May. 11, 2016
AO added penalty on expenses incurred by assessee on payment of interest of Excise and Service Tax. He also made disallowance on vehicle running and maintenance expenses. CIT(A) confirmed AO's order. On appeal ITAT, following Supreme Court's judgment in Lachmandas Mathuradas vs CIT, deleted addition on payment of interest as it was compensatory and not penal. It remanded the issue of disallowance to AO for examination of documentary evidence.-501094
