https://www.taxtmi.com/caselaws?id=29445 The court upheld the Tribunal's decision, allowing the deduction of Rs. 30,800 as a business expenditure for the assessment year 1967-68. The penalty imposed on the assessee for non-completion of work was considered deductible under the mercantile system of accounting, as it was viewed as compensation to the Military Engineering Services for the delay in completing the contract, rather than a statutory penalty. The court emphasized that such penalties were common in construction contracts and were incidental to the business activities of the assessee, leading to a ruling in favor of the assessee. en-us Mon, 01 Mar 1982 00:00:00 +0530 Fri, 12 Mar 2010 18:28:06 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=29445 The court upheld the Tribunal's decision, allowing the deduction of Rs. 30,800 as a business expenditure for the assessment year 1967-68. The penalty imposed on the assessee for non-completion of work was considered deductible under the mercantile system of accounting, as it was viewed as compensation to the Military Engineering Services for the delay in completing the contract, rather than a statutory penalty. The court emphasized that such penalties were common in construction contracts and were incidental to the business activities of the assessee, leading to a ruling in favor of the assessee. Case-Laws Income Tax Mon, 01 Mar 1982 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=29445