https://www.taxtmi.com/caselaws?id=67657 Deductibility of business outgoings depends on whether the expenditure is incurred in carrying on the business; retrenchment compensation paid on closure was therefore treated as capital or non-revenue in nature and disallowed, while ordinary expenses incurred during the brief operational period remained deductible. Gratuity and remuneration on realisation required further factual examination because their tax treatment depended on the governing terms. Section 41(2) applied only where the asset sold had earlier attracted depreciation allowance, so it covered depreciable assets such as iron scraps but not stock items like stores. Sales by the liquidator were still assessable in the company's hands because the liquidator acts for the company. en-us Tue, 06 Jul 1976 00:00:00 +0530 Sat, 12 Mar 2011 11:59:33 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=67657 Deductibility of business outgoings depends on whether the expenditure is incurred in carrying on the business; retrenchment compensation paid on closure was therefore treated as capital or non-revenue in nature and disallowed, while ordinary expenses incurred during the brief operational period remained deductible. Gratuity and remuneration on realisation required further factual examination because their tax treatment depended on the governing terms. Section 41(2) applied only where the asset sold had earlier attracted depreciation allowance, so it covered depreciable assets such as iron scraps but not stock items like stores. Sales by the liquidator were still assessable in the company's hands because the liquidator acts for the company. Case-Laws Income Tax Tue, 06 Jul 1976 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=67657