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2017 (8) TMI 561 - AT - Income TaxAddition on account of penal excise duty debited in P&L account - allowable business expenditure - Held that:- The assessee executed a contractual bond to make good the losses to the government, thus the assessee indemnify the excise duty to the government exchequer. The duty paid is exactly the same as per the rates notified by the government, therefore, the said payment in discharging the contractual obligation to indemnify the excise department for the payment of the excise duty to the government exchequer, cannot be held in penal nature. Therefore, whatever nomenclature given by the Excise Department for the demand notice cannot be held as penalty. In view of these facts and circumstances, we find no merit in the appeal of the revenue. SEE CIT Vs. Hyderabad Allwyn Metal Works Limited (1987 (11) TMI 32 - ANDHRA PRADESH High Court), Prakash Cotton Mills Pvt. Ltd. Vs. CIT (1993 (4) TMI 3 - SUPREME Court) and CIT, Gujarat Vs. Tarun Commercial Mills Co. Ltd. (1976 (4) TMI 35 - GUJARAT High Court). In view of the above facts and circumstances and the case laws, we uphold the order of the ld. CIT(A). - Decided against revenue.
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