COMMNR. OF INCOME TAX vs M/S. DISTILLERS CO. LTD.

The Supreme Court ruled that the amount paid by the respondent for not maturing arrack as per the Commissioner’s circular is not a penalty or excise duty, thus allowing for its deduction under Section 43B of the Income Tax Act, 1961. The Court upheld the Appellate Tribunal's decision that the payments were in the nature of an additional levy and not subject to the provisions of Section 43B. Consequently, the appeal by the Revenue was dismissed, affirming the High Court's ruling.