1985 (1) TMI 75

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....ed in law and on facts of the case by confirming ITO's holding that the penalty of Rs. 1,75,000 paid to custom authorities for import of machine cannot be added to the cost of machinery and consequently no depreciation and investment allowance is allowable on the amount." The assessee, a Limited Company, had imported a machine known as 'Jung Fully Automatic Internal Grinding Machine Model CM 8'....

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....increase of actual cost of the machine, the assessee was entitled to the said claim. The ITO, however, rejected the claim of the assessee on the ground that payment of penalty for infraction of law was not allowable as a business expenditure and, therefore, the same was not eligible to depreciation or investment allowance. 2. Being aggrieved, the assessee carried the matter in appeal before the....

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....t at issue is another the said amount would result in increase of the actual cost so as to be exigible to depreciation and investment allowance. In this connection we may refer to the decision relied upon on behalf of the assessee in Kores India Ltd. The relevant extract in this regard is set out hereunder: "17th Nov., 1982: Their Lordships Fazal Ali and Venkataramaiah, JJ. dismissed a Special ....