9911796707
TMI Blog1997 (5) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... llahabad High Court by the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal"), have been answered by the High Court against the assessee and in favour of the Revenue. In so far as questions Nos. 1, 3 and 4 are concerned, the High Court has mentioned that learned counsel for the assessee had conceded, that questions Nos. 1 and 3 were covered by the decision of the Full Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the said judgment. Questions Nos. 1 and 3 were as under (page 748 of [1980] 121 ITR) : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing deduction of the liability of Rs. 34,131 incurred by the assessee for the payment of damages under section 14B of the Employees' Provident Funds Act, 1952? (iii) Whether, on the facts and in the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry impost paid by an assessee by way of damages or penalty or interest, is claimed as an allowable expenditure under section 37(1) of the Act, the assessing authority is required to examine the scheme of 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 out whether it is compensatory or penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Miscellaneous Provisions Act, 1952. It was held that the said amount comprises both the elements of penal levy as well as compensatory payment and that it will be for the authority under the Act to decide with reference to the provisions of the Employees' Provident Funds Act, 1952 and the reasons given in the order imposing and quantifying the damages to determine what proportion should be treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Sales Tax Act. There is nothing on the record to show that the amount of penalty had a compensatory element in it. In the circumstances, we do not find any infirmity in the answer given by the High Court to question No. 3. The appeal is, therefore, partly allowed to the extent that the matter is remitted to the High Court to consider question No. 1 referred by the Tribunal in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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