Dismissing the appeal of the assessee the Court held that in the absence of any material to show that any element of compensation was involved in the penalty imposed under section 45A of the Kerala Act the amount of Rs. 52 lakhs could not be termed as an expenditure for the year 2004-05. On appeal Honourable Supreme Court affirmed the order of High Court. (AY. 2004-05)
PTL Enterprises Ltd. v. Dy. CIT (2022) 443 ITR 260 / 326 CTR 858 / 286 Taxman 564 (SC) Editorial : Decision in PTL Enterprises Ltd. v. Dy.CIT (2021) 439 ITR 365 / (2022) 212 DTR 404 / 326 CTR 282/ 286 Taxman 169 (Ker.)(HC) affirmed.
S. 37(1) : Business expenditure-Fines-Penalty-Not compensatory in nature-Not allowable as deduction. [Kerala General Sales tax Act, 1963, S. 45A]