Allowing the appeal of the revenue, the Court held that customs redemption fine is held to be not allowable as deduction  in view of explanation 1 to S. 37(1) of the Act. on concept of expenditure incurred for any purpose which is an offence or which is prohibited by law. Court held that there was ample evidence on record suggesting that assessee had made imports through his direct involvement by using import licence of Ranjikant Brothers   and that Rajnikant Brothers was only entitled to service charges and further redemption fine was paid by assessee, assessee could not not disassociate or divest himself from irregularities or illegalities committed in process of importing goods and penalty was levied for infraction of law committed by assessee. Under these circumstances, redemption fine was not an allowable business expenditure. Ratio laid down in Hazi Aziz & Abdl Shakoor Bros v. CIT (1961) 41 ITR  350 (SC) continues to hold the field even post decisions in the case of Prakah Cotton Mills Pvt Ltd v.CIT   (1993)  201 ITR 684 (SC) and CIT v. Ahmedabad Cotton Mfg Co Ltd. (1994)  205 ITR 163 (SC). In neither of these two decisions, the ratio laid down in Hazi Aziz, which was a decision of Bench of three Judges, has been diluted (CIT v.Pannalal Narottamdas & Co. (1968 ) 67 ITR 667 (Bom.)(HC) distinguished)  (ITA NO  51 of 2016  dt. 22-2-2019 (AY. 1988-89)