https://www.taxtmi.com/caselaws?id=29100 Amounts described as sales tax penalty, but limited to the difference between concessional tax paid and the full tax payable on the true use of goods, were held to be in substance part of the tax cost of the purchase. The Court treated the nomenclature of "penalty" as non-determinative because the liability did not exceed the tax that would have been payable had the correct business purpose been disclosed. On that basis, the disallowance under section 37(1) of the Income-tax Act was rejected and the amounts were treated as deductible business expenditure. en-us Fri, 21 May 1982 00:00:00 +0530 Wed, 10 Mar 2010 17:32:05 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=29100 Amounts described as sales tax penalty, but limited to the difference between concessional tax paid and the full tax payable on the true use of goods, were held to be in substance part of the tax cost of the purchase. The Court treated the nomenclature of "penalty" as non-determinative because the liability did not exceed the tax that would have been payable had the correct business purpose been disclosed. On that basis, the disallowance under section 37(1) of the Income-tax Act was rejected and the amounts were treated as deductible business expenditure. Case-Laws Income Tax Fri, 21 May 1982 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=29100