Penalty paid by a registered broker is not a fine for any infringement of law and hence allowable- ITAT Mumbai

M/s Total Securities Ltd Vs DCIT (ITAT Mumbai) – It was held by the Tribunal that penalty paid by the assessee as a registered broker to the stock exchange for not complying with various obligations/requirements is not in the nature of infringment of any law as envisaged in Explanation to section 37 and the same is allowable as deduction being the expenses wholly and exclusively incurred by the assessee for the purpose of its business. A similar view has been taken by the Chandigarh Bench of ITAT in the case of Master Capital Service Ltd. Vs. DCIT 23 SOT 69 (Chd.) Respectfully following ...