SANGHI G G Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference made by the Tribunal, Jaipur Bench, Jaipur (hereinafter referred to as "the Tribunal"), under s. 256(1) of the IT Act, 1961 (hereinafter referred to as "the Act"), the Tribunal has referred the following question of law for the opinion of this Court :

(2.) IN respect of the asst. yr. 1969-70, corresponding to the previous year ending on December 31, 1968, the petitioner, G. G. Sanghi (hereinafter referred to as "the assessee"), paid a sum of Rs. 4,175 as interest to the ST Department for late payment of tax. The assessee claimed deduction of the aforesaid amount of Rs. 4,175. The ITO did not allow the said deduction on the ground that the interest was paid on account of the assessee's default for non-payment of sales tax in time. The AAC, on appeal, however, allowed the deduction under s. 37(1) of the Act. The Tribunal, on appeal, restored the order passed by the ITO and disallowed the deduction. IN coming to the aforesaid view, the Tribunal placed reliance on the decision of the Delhi High Court in CIT vs. Mahalaxmi Sugar Mills Ltd. (1972) 85 ITR 320 (Del). Being aggrieved by the aforesaid order of the Tribunal, the assessee moved the Tribunal for referring the question of law arising out of the said order to this Court. Hence, this reference.