P.F. damages that are compensatory in nature are allowable as deduction u/s. 14B

Ambalal Sarabhai Enterprises Ltd. Vs The ACIT/DCIT Circle-1(1)/ Circle-1(1)(1) Race Course Circle (ITAT Ahmedabad)

ITAT Ahmedabad held that disallowance of claim of damages under section 14B of the P.F. Act not justified since 40% of damages are compensatory. Thus, held that P.F. damages that are compensatory in nature are allowed as deduction and balance 60% being penal in nature are not allowable.

Facts- The assessee-company is mainly engaged in the manufacture of drugs and pharmaceuticals, it also provides marketing and consultancy activities in respect o

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