Penalty

The penalty will be allowed even if it is paid in cash Rs. 25000 to the Govt. As payments made to Govt. in cash of Rs. 20000 or above does not attract disallowance u/s 40(a)(3).

Penalty is paid for disobeying the provisions of any law or Act. Hence, penalty cannot be claimed as an expense u/s 37.

Above amount Rs. 25000 will be disallowed being in paid in the nature of Penalty. 

Regards,

Devendra Kulkarni