https://www.taxtmi.com/caselaws?id=21860 Interest paid on delayed remittance of provident fund contributions was treated as compensatory, not penal, because section 7-Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 provides simple interest for delay. On that basis, the payment was regarded as linked to the underlying statutory liability and allowable as a business deduction under section 37 of the Income-tax Act, 1961. The legal distinction applied was between a compensatory outgoing, which is deductible, and a penal exaction, which is not. The answer was therefore in favour of the assessee. en-us Wed, 20 Mar 1991 00:00:00 +0530 Wed, 02 Dec 2009 12:33:07 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=21860 Interest paid on delayed remittance of provident fund contributions was treated as compensatory, not penal, because section 7-Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 provides simple interest for delay. On that basis, the payment was regarded as linked to the underlying statutory liability and allowable as a business deduction under section 37 of the Income-tax Act, 1961. The legal distinction applied was between a compensatory outgoing, which is deductible, and a penal exaction, which is not. The answer was therefore in favour of the assessee. Case-Laws Income Tax Wed, 20 Mar 1991 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=21860