https://www.taxtmi.com/caselaws?id=97698 Compensation paid to outgoing directors for loss of office was treated as a deductible business expense under section 10(2)(xv) of the Indian Income-tax Act, 1922. The payment was made after management shifted from the United Kingdom to India and was aimed at ending an expensive business arrangement. Because the articles fixed the directors' remuneration and tenure, the arrangement was treated as contractual in nature; even apart from contract, the payment was justified by commercial expediency as it reduced recurring expenditure and improved business supervision. The provision was read broadly, and a direct link with immediate profit was not required. The deduction was allowed as not capital in nature. en-us Wed, 17 Feb 1960 00:00:00 +0530 Fri, 07 Aug 2020 17:58:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=97698 Compensation paid to outgoing directors for loss of office was treated as a deductible business expense under section 10(2)(xv) of the Indian Income-tax Act, 1922. The payment was made after management shifted from the United Kingdom to India and was aimed at ending an expensive business arrangement. Because the articles fixed the directors' remuneration and tenure, the arrangement was treated as contractual in nature; even apart from contract, the payment was justified by commercial expediency as it reduced recurring expenditure and improved business supervision. The provision was read broadly, and a direct link with immediate profit was not required. The deduction was allowed as not capital in nature. Case-Laws Income Tax Wed, 17 Feb 1960 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=97698