Dismissing the appeal of the revenue the Tribunal held that ;payment to SEBI without admitting or denying guilt and was paid just to settle dispute, said settlement charges/consent fee could not be equated with penalty for violation of law under Explanation 1 to S. 37(1) of the Act and is allowable as business expenditure. Referred ITO v. Reliance Shares & Stock Brokers (P.) Ltd. (2015) 67 SOT 73 (Mum ) (Trib.). ( AY.2011-12)
DCIT v. Anil Dhirajlal Ambani. (2018) 171 ITD 144/ 66 ITR 607 / 172 DTR 17/ 195 TTJ 867 (Mum) (Trib.)
S.37(1):Business expenditure- Settlement charges paid to SEBI without admitting or denying guilt and was paid just to settle dispute, said settlement charges/consent fee could not be equated with penalty for violation of law under Explanation 1 to S. 37(1) of the Act and is allowable as business expenditure . [Securities and Exchange Board of India Act, 1992 , S.11, 1B and of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 R.11 ]