Assessing Officer disallowed interest paid on account of such exports not being in ‘technical textile’ category as penal in nature.  CIT(A) held that interest was allowable as a deduction. On appeal, the Tribunal held that the amount paid was not penal in nature as it was as per the declared policy of the government and occasioned by the failure of the assessee to meet its obligations. The amount being interest was compensatory and penal in nature. High Court affirmed the order of the Tribunal. (AY. 2014-15)