https://www.taxtmi.com/caselaws?id=49525 A payment made to secure release of confiscated imported goods was held not to be deductible as business expenditure because it arose from breach of import restrictions and operated as a penalty under customs law. The governing test is whether the outlay was laid out wholly and exclusively for the purpose of earning business profits; a sum paid for infraction of law fails that test, even if the proceeding is directed against the goods rather than the trader personally. The amount paid in lieu of confiscation was therefore not a commercial loss incidental to the carrying on of business and was disallowed under the income-tax provision. en-us Thu, 24 Nov 1960 00:00:00 +0530 Mon, 03 Nov 2025 15:52:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=49525 A payment made to secure release of confiscated imported goods was held not to be deductible as business expenditure because it arose from breach of import restrictions and operated as a penalty under customs law. The governing test is whether the outlay was laid out wholly and exclusively for the purpose of earning business profits; a sum paid for infraction of law fails that test, even if the proceeding is directed against the goods rather than the trader personally. The amount paid in lieu of confiscation was therefore not a commercial loss incidental to the carrying on of business and was disallowed under the income-tax provision. Case-Laws Income Tax Thu, 24 Nov 1960 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=49525