1985 (8) TMI 40

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....stions of law referred by the Tribunal to this court for its decision under section 256(1) of the Income-tax Act, 1961, involve substantially only one point, namely, whether the Tribunal was justified in allowing the deduction of Rs. 32,480 imposed as penalty under section 8(2) of the M. P. General Sales Tax Act as a business expenditure under section 37(1) of the Income-tax Act, 1961 ? The conte....

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....nd the tax payable at concessional rate or it was an amount in excess of this difference. It was held that where the amount depicted only the difference between the tax at full rate and the tax at concessional rate, it should be allowed as a deduction under section 37(1) of the Income-tax Act, 1961. On the other hand, if the amount of penalty is an amount in excess of this difference, also called ....