https://www.taxtmi.com/caselaws?id=28214 A payment made under a municipal regularisation scheme for building-plan deviations was treated as compensatory rather than penal where the statute permitted acceptance of a reasonable sum instead of demolition or alteration. Because the assessee was engaged in construction and sale of flats, the payment was incurred to preserve the building, protect closing stock, and continue the business. On ordinary commercial principles, it was directly connected with business operations and not a penalty for breach of law. The amount was therefore allowable as a business deduction in computing profits. en-us Fri, 13 Jan 1984 00:00:00 +0530 Fri, 19 Feb 2010 17:04:25 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=28214 A payment made under a municipal regularisation scheme for building-plan deviations was treated as compensatory rather than penal where the statute permitted acceptance of a reasonable sum instead of demolition or alteration. Because the assessee was engaged in construction and sale of flats, the payment was incurred to preserve the building, protect closing stock, and continue the business. On ordinary commercial principles, it was directly connected with business operations and not a penalty for breach of law. The amount was therefore allowable as a business deduction in computing profits. Case-Laws Income Tax Fri, 13 Jan 1984 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=28214