https://www.taxtmi.com/caselaws?id=446105 ITAT Delhi allowed partial deduction for compensation paid by theatre owner in Uphaar Cinema fire case. The tribunal distinguished between restitution damages (allowable as business expenditure under Section 37(1)) and punitive damages (not allowable). While compensatory damages arising from civil consequences constitute allowable business expenditure, punitive damages of Rs. 25 lacs were disallowed as they were not incurred in ordinary course of business. The tribunal also allowed legal and professional expenses, noting that despite business closure due to fire, the assessee required legal representation for ongoing litigation across multiple forums over several years. en-us Wed, 22 Nov 2023 00:00:00 +0530 Fri, 24 Nov 2023 17:30:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=446105 ITAT Delhi allowed partial deduction for compensation paid by theatre owner in Uphaar Cinema fire case. The tribunal distinguished between restitution damages (allowable as business expenditure under Section 37(1)) and punitive damages (not allowable). While compensatory damages arising from civil consequences constitute allowable business expenditure, punitive damages of Rs. 25 lacs were disallowed as they were not incurred in ordinary course of business. The tribunal also allowed legal and professional expenses, noting that despite business closure due to fire, the assessee required legal representation for ongoing litigation across multiple forums over several years. Case-Laws Income Tax Wed, 22 Nov 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=446105