https://www.taxtmi.com/caselaws?id=26653 A accrued statutory sales tax liability was treated as deductible in computing business income where the assessee followed the mercantile system, so the additional sales tax was allowable as a business deduction. By contrast, a penalty imposed for late filing of a return under the Madhya Pradesh General Sales Tax Act was held to be a penal levy arising from breach of a statutory obligation and not a commercial loss incurred wholly and exclusively for business purposes, so it was not deductible. The reference was therefore treated as partly in favour of the assessee and partly in favour of the Revenue. en-us Sat, 25 Jan 1986 00:00:00 +0530 Sat, 06 Feb 2010 15:47:47 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=26653 A accrued statutory sales tax liability was treated as deductible in computing business income where the assessee followed the mercantile system, so the additional sales tax was allowable as a business deduction. By contrast, a penalty imposed for late filing of a return under the Madhya Pradesh General Sales Tax Act was held to be a penal levy arising from breach of a statutory obligation and not a commercial loss incurred wholly and exclusively for business purposes, so it was not deductible. The reference was therefore treated as partly in favour of the assessee and partly in favour of the Revenue. Case-Laws Income Tax Sat, 25 Jan 1986 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=26653