1994 (4) TMI 2

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..... ties are obligated to bifurcate the two components of the impost and give deduction to that component which is compensatory in nature and refuse to give deduction to that component which is penal in nature - - - - - Dated:- 22-4-1994 - M. N. VENKATACHALAIAH. and R. M. SAHAI., S. MOHAN. JUDGMENT The petitioner seeks special leave to appeal directly from the order dated January 1, 1992, of .....

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..... on 36(3) of the Bombay Sales Tax Act, 1959. If the exaction partakes of the character of a penalty, its deductibility as an allowable business or revenue expenditure gets contested. If, on the other hand, it is compensatory in character, the claim admits of being considered as an allowable deduction subject to the other provisions of the Act. The point raised seems to be covered by the pronounce .....

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..... f the provisions of the relevant statute providing for payment of such impost notwithstanding the nomenclature of the impost as given by the statute, to find whether it is compensatory or penal in nature. The authority has to allow deduction under section 37(1) of the Income-tax Act, wherever such examination reveals the concerned impost to be purely compensatory in nature. Wherever such impost is .....

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