https://www.taxtmi.com/caselaws?id=170755 Expenditure incurred for a purpose that is an offence or otherwise prohibited by law is not allowable as a business deduction under section 37(1) of the Income-tax Act, 1961, because such outlay cannot be treated as wholly and exclusively for business purposes. On that principle, the claim for deduction of the specified payment was rejected. By contrast, the additional sales tax liability was treated as an allowable revenue deduction in computing total income, as governed by the settled legal position on such liability. The document therefore distinguishes between prohibited expenditure, which is nondeductible, and a permissible business liability, which may be deducted when the law permits. en-us Mon, 12 Mar 2007 00:00:00 +0530 Fri, 12 Jun 2015 15:28:46 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=170755 Expenditure incurred for a purpose that is an offence or otherwise prohibited by law is not allowable as a business deduction under section 37(1) of the Income-tax Act, 1961, because such outlay cannot be treated as wholly and exclusively for business purposes. On that principle, the claim for deduction of the specified payment was rejected. By contrast, the additional sales tax liability was treated as an allowable revenue deduction in computing total income, as governed by the settled legal position on such liability. The document therefore distinguishes between prohibited expenditure, which is nondeductible, and a permissible business liability, which may be deducted when the law permits. Case-Laws Income Tax Mon, 12 Mar 2007 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=170755