https://www.taxtmi.com/caselaws?id=18696 A levy described as a penalty under section 36(3) of the Bombay Sales Tax Act was treated as composite, containing both compensatory and penal elements. The operative principle is that the label of the charge is not decisive; its real character must be examined as a whole. For income-tax purposes, only the compensatory portion may be considered for deduction, while the penal portion remains non-deductible. Where a payment has mixed character, deductibility requires apportionment between the two components rather than treating the entire amount as allowable. en-us Wed, 05 Jul 1995 00:00:00 +0530 Sat, 31 Oct 2009 13:42:24 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=18696 A levy described as a penalty under section 36(3) of the Bombay Sales Tax Act was treated as composite, containing both compensatory and penal elements. The operative principle is that the label of the charge is not decisive; its real character must be examined as a whole. For income-tax purposes, only the compensatory portion may be considered for deduction, while the penal portion remains non-deductible. Where a payment has mixed character, deductibility requires apportionment between the two components rather than treating the entire amount as allowable. Case-Laws Income Tax Wed, 05 Jul 1995 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=18696