https://www.taxtmi.com/caselaws?id=76508 Payments made to compound violations of a sanctioned building plan are penal in nature where the municipal law treats them as compounding an offence against the Act, rules, bye-laws or regulations. Re-labelling such a payment as a regularisation fee does not change its character. As a penalty, the amount is not an admissible deduction under section 37(1) of the Income-tax Act, 1961, because expenditure incurred to compound an offence cannot be allowed as a business deduction. en-us Tue, 19 Jan 2010 00:00:00 +0530 Thu, 15 Mar 2012 16:37:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=76508 Payments made to compound violations of a sanctioned building plan are penal in nature where the municipal law treats them as compounding an offence against the Act, rules, bye-laws or regulations. Re-labelling such a payment as a regularisation fee does not change its character. As a penalty, the amount is not an admissible deduction under section 37(1) of the Income-tax Act, 1961, because expenditure incurred to compound an offence cannot be allowed as a business deduction. Case-Laws Income Tax Tue, 19 Jan 2010 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=76508