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Expense allowable /disallowable

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Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2015 Dear Sir,

Amount paid towards penalty for Excess load to state electrical board is allowable Business expenditure or not?

Sandeep Dharar

Sandeep Dharar (Expert)
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01 July 2015 It is fully allowed Business Expenditure.

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2015 Hi Sandeep

Is it possible for you to provide the judgement for the above query.

Thanks

CA Aman Gupta

CA Aman Gupta (Expert)
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01 July 2015 Penalty, fines, etc paid by the assessee to State Electricity Board for violating power regulation (drawing extra load in peak hours) was allowable deduction u/s. 37(1) of the Act. The Court further observed that if penalty is not for deliberate violation of law the same should be allowed as deduction. Refer Hero Cycles Ltd. 17 DTR 281.

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