https://www.taxtmi.com/caselaws?id=787510 Whether sums withheld by a government purchaser for late supply are penal or deductible business expenditure: ITAT applied the principle that only expenditure incurred for an offence or prohibited by law is excluded from deduction under the tax rule, and found the withholdings arose from contractual damages under tender terms rather than statutory or criminal penalties; the lower authorities relied on unsupported assertions of habitual default. Outcome: the additions were set aside and the amounts held deductible as compensatory business expenditure. en-us Wed, 28 Jan 2026 00:00:00 +0530 Sat, 07 Mar 2026 08:39:15 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=787510 Whether sums withheld by a government purchaser for late supply are penal or deductible business expenditure: ITAT applied the principle that only expenditure incurred for an offence or prohibited by law is excluded from deduction under the tax rule, and found the withholdings arose from contractual damages under tender terms rather than statutory or criminal penalties; the lower authorities relied on unsupported assertions of habitual default. Outcome: the additions were set aside and the amounts held deductible as compensatory business expenditure. Case-Laws Income Tax Wed, 28 Jan 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=787510