https://www.taxtmi.com/caselaws?id=5683 Damages or penalties claimed as deductions must be examined by their real character, not their label. For section 14B damages under the EPF Act, the applicable test is whether the impost is compensatory, penal, or composite; if composite, only the compensatory component is deductible under section 37(1), and the issue was remitted for reconsideration on that basis. Penalty imposed for contravention of the Central Sales Tax Act, with no compensatory element shown, was not allowable as a deduction under section 37(1), and the disallowance was upheld. en-us Thu, 01 May 1997 00:00:00 +0530 Tue, 16 Dec 2025 13:07:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=5683 Damages or penalties claimed as deductions must be examined by their real character, not their label. For section 14B damages under the EPF Act, the applicable test is whether the impost is compensatory, penal, or composite; if composite, only the compensatory component is deductible under section 37(1), and the issue was remitted for reconsideration on that basis. Penalty imposed for contravention of the Central Sales Tax Act, with no compensatory element shown, was not allowable as a deduction under section 37(1), and the disallowance was upheld. Case-Laws Income Tax Thu, 01 May 1997 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=5683