Penality allowed or not ,as expense

In case you won the appeal then it will be either refund to your bank account or might transfer to your cash ledger account, in both the cases it will not become part of your expenses thus there will be no question of disallowing aruse. If understand your question correctly then this will be my point oof view.

Agree with the above answer.

However, if you had lost the appeal...penalty on GST would have been disallowed as per explanation 1 to Section 37.

Actually we not claim that amount due some issues because, department said the amount will be credit to the account of driver. so can we claim as expense