https://www.taxtmi.com/caselaws?id=21765 A payment made toward a shortfall in premium under the Emergency Risks Insurance Act, 1971 was treated as discharge of a pre-existing business liability rather than a penalty for breach of law. Because the amount arose from the assessee's obligation under the insurance scheme and not from a punitive sanction, it was incurred in the course of business and qualified as deductible business expenditure under section 37 of the Income-tax Act, 1961. The legal principle applied is that a payment made to satisfy a business obligation, without the character of an infraction-based penalty, is allowable as revenue expenditure. en-us Mon, 04 Dec 1989 00:00:00 +0530 Sat, 28 Nov 2009 15:38:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=21765 A payment made toward a shortfall in premium under the Emergency Risks Insurance Act, 1971 was treated as discharge of a pre-existing business liability rather than a penalty for breach of law. Because the amount arose from the assessee's obligation under the insurance scheme and not from a punitive sanction, it was incurred in the course of business and qualified as deductible business expenditure under section 37 of the Income-tax Act, 1961. The legal principle applied is that a payment made to satisfy a business obligation, without the character of an infraction-based penalty, is allowable as revenue expenditure. Case-Laws Income Tax Mon, 04 Dec 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=21765