Settlement payment towards patent disputes is allowable business deduction u/s. 37(1)

Advertisement DCIT Vs AIA Engineering Ltd (ITAT Ahmedabad) ITAT Ahmedabad held that settlement payments in relation to patent disputes are allowable as business deduction under section 37(1) of the Income Tax Act since the same is not a penalty for an offence or for a purpose prohibited by law. Facts- The assessee is engaged in the business of design, development, manufacture, installation and servicing of high chromium wear, corrosion and abrasion resistant casting used in the cement, mining and thermal power generation industries. The assessee has agitated against the action of the Ld. C...