https://www.taxtmi.com/caselaws?id=29646 The High Court held that the forfeiture of guarantee amounts by the textile mill to the Indian Cotton Mills Federation was a proper business expenditure under section 37 of the Income-tax Act, 1961. The court determined that the forfeiture was not a penalty or damages for breach of contract but rather incidental to the business to avoid higher losses. The court agreed with the Appellate Authority Commissioner that the losses were allowable as they were deemed necessary to prevent further losses in the assessee's business. The reference was answered in favor of the assessee, with no order as to costs. en-us Mon, 14 Sep 1981 00:00:00 +0530 Mon, 15 Mar 2010 13:14:49 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=29646 The High Court held that the forfeiture of guarantee amounts by the textile mill to the Indian Cotton Mills Federation was a proper business expenditure under section 37 of the Income-tax Act, 1961. The court determined that the forfeiture was not a penalty or damages for breach of contract but rather incidental to the business to avoid higher losses. The court agreed with the Appellate Authority Commissioner that the losses were allowable as they were deemed necessary to prevent further losses in the assessee's business. The reference was answered in favor of the assessee, with no order as to costs. Case-Laws Income Tax Mon, 14 Sep 1981 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=29646