Arising from out of the order of the Tribunal, the following question was referred to the High Court of Madhya Pradesh under the provisions of Section 256 of the Income tax Act see page 222 of 135 ITR Whether, on the facts and in the circumstances of the case, the penalty levied under sections 8 2 and 17 3 of the Madhya Pradesh General Sales Tax Act paid by the assessee is allowable expenditure in the companyputation of total income ?
In its income tax returns for these assessment years the assessee claimed as deduction of expenditure for the purpose of business under Section 37 1 of the Income tax Act, 1961, amounts that it had paid to the Madhya Pradesh sales tax authorities under the provisions of sections 8 2 and 17 3 of the Madhya Pradesh General Sales Tax Act, 1958.
These appeals relate to the assessment years 1971 72, 1972 73 and 1973 74.
The matter was carried by the assessee up to the Income tax Appellate Tribunal, which held that it was entitled to the deduction.
