https://www.taxtmi.com/caselaws?id=39672 A penalty paid for breach of customs law was treated as neither a business loss under section 10(1) nor deductible business expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922. The governing principle applied was that a deductible expense must be laid out wholly and exclusively for the purpose of business, while a business loss must spring directly from and be incidental to trading operations. Amounts paid because the assessee incurred liability for infraction of law were held not to be commercial losses or normal incidents of trade. The claim was therefore rejected in favour of the Revenue. en-us Wed, 21 Aug 1974 00:00:00 +0530 Mon, 19 Apr 2010 16:10:12 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39672 A penalty paid for breach of customs law was treated as neither a business loss under section 10(1) nor deductible business expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922. The governing principle applied was that a deductible expense must be laid out wholly and exclusively for the purpose of business, while a business loss must spring directly from and be incidental to trading operations. Amounts paid because the assessee incurred liability for infraction of law were held not to be commercial losses or normal incidents of trade. The claim was therefore rejected in favour of the Revenue. Case-Laws Income Tax Wed, 21 Aug 1974 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39672