03 December 2009
A pharma. company has made payment of : 200000.00 50000.00 (interest) due to govt. order, since pharma co. can not sell the medicines above govt. specified M.R.P.Hence whether this will be cosidered as EXPENDITURE INCURRED FOR PURPOSE WHICH IS OFFENCE OR PROHIBITED BY ANY LAW. please tell me whether this 2500000.00 is allowed U/S 37 of income tax or not. If any case law is there please tell me. Thanks.
03 December 2009
Any payment in the nature of penalty is not allowable as deduction u/s 37. In my opinion it is a sort of penalty for not meeting requirement. Hence it is not allowable.
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