https://www.taxtmi.com/caselaws?id=7284 A statutory penalty imposed for default in paying sugarcane cess was held not to be deductible as business expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922. The Court applied the principle that a payment made for breach of law is not laid out wholly and exclusively for the purposes of business and cannot be treated as a commercial loss. The assessee's financial difficulty and any liability to pay interest did not change the character of the penalty, especially as the default also attracted criminal liability under the Cess Act. The deduction claim was therefore rejected and the issue answered in favour of the Revenue. en-us Fri, 29 Mar 1968 00:00:00 +0530 Mon, 16 Feb 2009 18:35:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7284 A statutory penalty imposed for default in paying sugarcane cess was held not to be deductible as business expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922. The Court applied the principle that a payment made for breach of law is not laid out wholly and exclusively for the purposes of business and cannot be treated as a commercial loss. The assessee's financial difficulty and any liability to pay interest did not change the character of the penalty, especially as the default also attracted criminal liability under the Cess Act. The deduction claim was therefore rejected and the issue answered in favour of the Revenue. Case-Laws Income Tax Fri, 29 Mar 1968 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7284