https://www.taxtmi.com/caselaws?id=180716 Compensation paid bona fide to settle a managing director's claim on termination of service was held deductible as business expenditure, because the governing test is whether the outlay was incurred wholly and exclusively for business purposes on grounds of commercial expediency. The revenue could not disallow the deduction merely by viewing the amount as excessive or by substituting its own assessment of what a smaller settlement or litigation award might have been. Where the transaction is genuine, free from collateral purpose, and one that an ordinary prudent businessman could reasonably make, the deduction is allowable. en-us Thu, 08 Oct 1959 00:00:00 +0530 Thu, 31 Mar 2016 18:25:20 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=180716 Compensation paid bona fide to settle a managing director's claim on termination of service was held deductible as business expenditure, because the governing test is whether the outlay was incurred wholly and exclusively for business purposes on grounds of commercial expediency. The revenue could not disallow the deduction merely by viewing the amount as excessive or by substituting its own assessment of what a smaller settlement or litigation award might have been. Where the transaction is genuine, free from collateral purpose, and one that an ordinary prudent businessman could reasonably make, the deduction is allowable. Case-Laws Income Tax Thu, 08 Oct 1959 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=180716