COMMISSIONER OF INCOME-TAX vs PRAFULLA KUMAR MALLICK — 1971 PTD 804

Citation: 1971 PTD 804

Court: Orissa High Court

Year: 1969

Decision Date: 1969-01-23

Parties: COMMISSIONER OF INCOME-TAX vs PRAFULLA KUMAR MALLICK

Headnotes

Case cited as 1971 PTD 804

Judgment Text

Court Name: Orissa High Court Judge(s): S. Barman, B. K. Patra Title: COMMISSIONER OF INCOME-TAX vs PRAFULLA KUMAR MALLICK Case No.: Case No. 31 of 1961 Date of Judgment:1969-01-23 Reported As: 1971 PTD 804 Result: accordingly answer JUDGMENT JUDGMENT BARMAN, C. J.-----This matter arises out of a question referred by the Income-tax Appellate Tribunal to this Court under section 66(1) of the Indian Income-tax Act, 1922, for decision. The question referred is: "Whether, on the facts and circumstances of the case, the amount of Rs. 25,700 paid by the assessee by way of penalty to the Government of Orissa was an admissible deduction under section 10(1) of the Income-tax Act, 1922?" This Court by its judgment dated January 22, 1963, while dealing with this question, considered the provisions of section 10(2) of the Income-tax Act and held that the deduction claimed by the assessee was not admissible as it amounted to a penalty imposed on the assessee for his dishonest action in supplying sub-standard quality goods and, as such, it could not be said to be an expenditure incurred wholly and exclusively for the purpose of his business. The facts and circumstances in which the question was referred to the High Court are these : During the calendar year 1954, which was the year previous to the assessment year 1955-56, the opposite-party (hereinafter referred to as the "assessee" worked as the paddy procuring agent under the Government of Orissa on the basis of an agreement entered…

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