https://www.taxtmi.com/caselaws?id=29649 Penalties imposed for breach of sales tax law were not deductible as business expenditure under section 37(1) of the Income-tax Act, because an amount laid out wholly and exclusively for business cannot include a liability imposed for statutory infraction. The Court treated such penalties as personal liabilities arising after breach was found, not as commercial losses incurred in the course of business. Even though the assessee argued that the breach was only technical and that the levy under section 8(2) reflected a tax differential, the character of the payment remained penal. The disallowance was therefore upheld and the claim failed. en-us Fri, 13 Feb 1981 00:00:00 +0530 Mon, 15 Mar 2010 13:20:12 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=29649 Penalties imposed for breach of sales tax law were not deductible as business expenditure under section 37(1) of the Income-tax Act, because an amount laid out wholly and exclusively for business cannot include a liability imposed for statutory infraction. The Court treated such penalties as personal liabilities arising after breach was found, not as commercial losses incurred in the course of business. Even though the assessee argued that the breach was only technical and that the levy under section 8(2) reflected a tax differential, the character of the payment remained penal. The disallowance was therefore upheld and the claim failed. Case-Laws Income Tax Fri, 13 Feb 1981 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=29649