https://www.taxtmi.com/caselaws?id=215373 Compounding fee paid to a development authority cannot be characterised in the abstract for purposes of the Explanation to section 37(1) of the Income-tax Act; the decisive question is whether the payment was for an offence or prohibited act, or instead was penal or compensatory under the governing statutory framework. Because the compounding order, relevant statute, rules and building bye-laws were not examined, the factual and legal basis was incomplete. The issue could not be finally decided on merits at that stage, and the matter was restored for fresh consideration after reviewing the applicable provisions and evidence. en-us Thu, 31 May 2012 00:00:00 +0530 Fri, 03 Aug 2012 06:39:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=215373 Compounding fee paid to a development authority cannot be characterised in the abstract for purposes of the Explanation to section 37(1) of the Income-tax Act; the decisive question is whether the payment was for an offence or prohibited act, or instead was penal or compensatory under the governing statutory framework. Because the compounding order, relevant statute, rules and building bye-laws were not examined, the factual and legal basis was incomplete. The issue could not be finally decided on merits at that stage, and the matter was restored for fresh consideration after reviewing the applicable provisions and evidence. Case-Laws Income Tax Thu, 31 May 2012 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=215373