TMI Blog1998 (11) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and circumstances of the case, the penalty paid by the assessee under section 10A of the Central Sales Tax Act, 1956, is an admissible deduction in computing the income from the business of the assessee ?" The assessment year is 1977-78. The assessee is a private limited company engaged in the business of constructing buildings. It had obtained "C" form and availed of the concessiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tute is not by itself decisive of its true character, as observed by Malwa Vanaspati Chemical Co. v. CIT (1997) 225 ITR 383 . "The use of tile word 'penalty' the Supreme Court in the provision is neither here nor there". It is only when a levy does not have any compensatory character that it has to be regarded as penalty. In the case of Malwa Vanaspati and Chemical Co. (1997) 225 ITR 383, the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd penalty in so far as something more up to 25 per cent. thereon being payable, should the Commissioner so direct. It is, therefore, necessary for the authority to ascertain as to whether the levy termed penalty can only be regarded as such and not in any other manner. Reliance was placed by counsel on the decision of the Supreme Court in the Maddi Venkataraman and Co. (P.) Ltd. v. CIT (1998) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Section 10A of the Central Sales Tax Act empowers the authority to impose upon a person, who is guilty of an offence under clause (b), (c) or (d) of section 10 by way of penalty a sum not exceeding one and a half times the tax which would have been levied under sub-section (2) of section 8 in respect of the sale to him of the goods, if the sale had been a sale falling with in that sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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