https://www.taxtmi.com/caselaws?id=216889 Compensation paid by a merchant banker to settle claims arising from failed securities transactions was treated as deductible business expenditure because it was incurred on commercial expediency to protect reputation, client relations and business interests; an RBI penalty for breach of banking law was not deductible as it arose from a statutory violation. Further disallowance under section 14A for interest and administrative expenses was deleted where substantial interest-free funds exceeded tax-free investments and no actual nexus with exempt income was shown. A deduction claim under section 36(1)(vii) was sent back for verification in line with an earlier tribunal order and the CBDT instruction on opening credit balance. Remaining revenue objections on capital or revenue character of expenses were rejected. en-us Tue, 31 Jul 2012 00:00:00 +0530 Mon, 11 Apr 2016 10:36:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=216889 Compensation paid by a merchant banker to settle claims arising from failed securities transactions was treated as deductible business expenditure because it was incurred on commercial expediency to protect reputation, client relations and business interests; an RBI penalty for breach of banking law was not deductible as it arose from a statutory violation. Further disallowance under section 14A for interest and administrative expenses was deleted where substantial interest-free funds exceeded tax-free investments and no actual nexus with exempt income was shown. A deduction claim under section 36(1)(vii) was sent back for verification in line with an earlier tribunal order and the CBDT instruction on opening credit balance. Remaining revenue objections on capital or revenue character of expenses were rejected. Case-Laws Income Tax Tue, 31 Jul 2012 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=216889