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Jamna Auto Industries vs. CIT (P & H High Court) (Full Bench)

COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: January 31, 2008 (Date of publication)
AY:
FILE:
CITATION:

While damages or penalty which are compensatory in nature are allowable as a deduction u/s 37(1) of the Act, damages which are penal in nature and in respect of infraction of law are not allowable as a business expenditure. Amounts paid by way of damages for a contractual breach is a normal incident of business and allowable as a deduction.

Baldev Singh Kanwar vs. CIT (1997) ITR 640 overruled.

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