https://www.taxtmi.com/caselaws?id=24997 The Andhra Pradesh HC held that where a statutory levy contains both compensatory and penal elements, deduction under the Income-tax Act is confined to the compensatory component only. Damages paid under section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act were therefore not wholly deductible, because the levy was composite in character. Interest paid on delayed sales tax under section 36(3) of the Bombay Sales Tax Act was treated similarly, as the statutory scheme showed a mixed compensatory and penal nature. The deductible amount had to be ascertained from the character of the levy and the order imposing it, with the matter remitted for apportionment. en-us Wed, 11 Nov 1987 00:00:00 +0530 Fri, 16 Jan 2026 11:19:30 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=24997 The Andhra Pradesh HC held that where a statutory levy contains both compensatory and penal elements, deduction under the Income-tax Act is confined to the compensatory component only. Damages paid under section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act were therefore not wholly deductible, because the levy was composite in character. Interest paid on delayed sales tax under section 36(3) of the Bombay Sales Tax Act was treated similarly, as the statutory scheme showed a mixed compensatory and penal nature. The deductible amount had to be ascertained from the character of the levy and the order imposing it, with the matter remitted for apportionment. Case-Laws Income Tax Wed, 11 Nov 1987 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=24997