https://www.taxtmi.com/caselaws?id=20430 Statutory imposts must be characterised by their true substance under the relevant provision, not by their label: if a levy is purely compensatory, it is deductible in computing business income, but if it is composite, the compensatory element must be segregated from the penal element and only that portion allowed. Applying that principle to damages and interest levied under section 14B of the Employees' Provident Funds and Family Pension Act, 1952, the interest component attributable to delay was compensatory and deductible, while the penalty component for default was not. The Tribunal erred in treating the entire levy as penal and disallowing the deduction. en-us Thu, 09 Sep 1993 00:00:00 +0530 Fri, 13 Nov 2009 18:50:15 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=20430 Statutory imposts must be characterised by their true substance under the relevant provision, not by their label: if a levy is purely compensatory, it is deductible in computing business income, but if it is composite, the compensatory element must be segregated from the penal element and only that portion allowed. Applying that principle to damages and interest levied under section 14B of the Employees' Provident Funds and Family Pension Act, 1952, the interest component attributable to delay was compensatory and deductible, while the penalty component for default was not. The Tribunal erred in treating the entire levy as penal and disallowing the deduction. Case-Laws Income Tax Thu, 09 Sep 1993 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=20430