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2013 (7) TMI 114 - HC - Income TaxDeduction u/s 37(1) - penalty paid to the Apparel Export Promotion Council - Forfeiture of gurantee - failure to fulfil the obligation to export - ITAT allowed the deduction - Held that:- respondent took a business decision not to honour its commitment of fulfilling the export entitlement in view of loss being suffered by it. The Assessing Officer does not dispute this fact nor does he doubt the genuineness of the claim of the expenditure being for business purpose. In these facts the Tribunal held that respondent assessee has not contravened any provisions of law and thus the forfeiture of the bank guarantee was compensatory in nature under section 37(1) of the Act - Decided in favour of revenue.
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