https://www.taxtmi.com/caselaws?id=21100 Penalty paid for demanding, charging or retaining unauthorised sales tax under the Rajasthan Sales Tax Act was held not deductible in computing total income. Expenditure incurred for breach of law is not a normal incident of business and cannot be treated as a commercial loss. The deduction claim under section 37 of the Income-tax Act failed because the penalty was not laid out wholly and exclusively for business purposes. The distinction between an automatic statutory liability and a discretionary penalty supported denial of the deduction, so the amount was disallowed. en-us Tue, 13 Oct 1992 00:00:00 +0530 Fri, 20 Nov 2009 10:46:12 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=21100 Penalty paid for demanding, charging or retaining unauthorised sales tax under the Rajasthan Sales Tax Act was held not deductible in computing total income. Expenditure incurred for breach of law is not a normal incident of business and cannot be treated as a commercial loss. The deduction claim under section 37 of the Income-tax Act failed because the penalty was not laid out wholly and exclusively for business purposes. The distinction between an automatic statutory liability and a discretionary penalty supported denial of the deduction, so the amount was disallowed. Case-Laws Income Tax Tue, 13 Oct 1992 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=21100