DIPAK KUMAR SEN, J. - (1.) BHARAT Mining Corporation Ltd., the assessee, was assessed to income-tax for the asst. yr. 1972-73 the accounting year ending on March 31, 1972. The assessee claimed deduction of an amount of Rs. 30,107 which was stated to have been paid on account of interest for late payment of provident fund dues in respect of a colliery owned by the assessee. The ITO disallowed the claim on the ground that the amount paid represented a penalty imposed on the assessee.
(2.) IN an appeal by the assessee, the AAC accepted the contention of the assessee noting that interest paid by the assessee on account of late payment of cess had been allowed by the Tribunal and the AAC in the case of the assessee earlier. The AAC in this view allowed the claim of the assessee for deduction of interest paid for late payment of provident fund dues and allowed the appeal on this point. Being aggrieved, the Revenue went up on further appeal before the Tribunal. It was contended before the Tribunal on behalf of the Revenue that the provident fund dues had to be paid by the assessee in the capacity of an employer and not in the capacity of a businessman. Therefore, the interest charged for late payment of such dues was not allowable as deduction in computing the income of the assessee.
(3.) IT was urged on behalf of the assessee that in view of the decision of the Tribunal for the asst. yr. 1969-70 in the case of the assessee allowing interest for late payment of cess, the assessee should be allowed a deduction on account of interest paid for late payment of provident fund dues. The Tribunal accepted the contention of the assessee and the appeal of the Revenue on this point was rejected.;