Levy for failure to meet textile packing quotas treated as penalty, not allowable deduction; assistance is taxable.

Payments by textile producers for failure to meet prescribed packing or production minima under the Cotton Textile(Control) Order, 1948 are characterised as a penalty and are not allowable as deduction u/s 37, whereas cash assistance paid for excess packing is a revenue receipt and must be included in taxable income. The Board directs review of completed assessments for specified concerns (2 May 1968-31 May 1971) to recover disallowed deductions and include excluded assistance, with a report due by 31 January 1976.

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