https://www.taxtmi.com/caselaws?id=97698 Compensation paid to outgoing directors for loss of office may be deducted as business expenditure where it terminates an expensive management arrangement and facilitates more efficient business operations. Directors' remuneration and tenure fixed by the articles of association may establish a contractual arrangement, but deductibility can also rest on commercial expediency. Expenditure need not have a direct or immediate connection with earning profits if it is incurred wholly and exclusively for business purposes and is not capital in nature. The payment reduced recurring costs and improved operational supervision, supporting its treatment as an allowable deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922. 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 may be deducted as business expenditure where it terminates an expensive management arrangement and facilitates more efficient business operations. Directors' remuneration and tenure fixed by the articles of association may establish a contractual arrangement, but deductibility can also rest on commercial expediency. Expenditure need not have a direct or immediate connection with earning profits if it is incurred wholly and exclusively for business purposes and is not capital in nature. The payment reduced recurring costs and improved operational supervision, supporting its treatment as an allowable deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922. Case-Laws Income Tax Wed, 17 Feb 1960 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=97698