https://www.taxtmi.com/caselaws?id=5019 Liability to pay retrenchment compensation under section 25FF of the Industrial Disputes Act, 1947, arising only on transfer of an undertaking, is not an allowable deduction in computing business profits if it is still contingent when the accounts are made up. The obligation is not a present debt incurred in the course of carrying on the business; it becomes enforceable only on the transfer event. A contingent provision is not a proper business outgoing under mercantile accounting, and expenditure that springs from the transfer of the business itself is outside allowable deduction provisions. en-us Thu, 20 Apr 1967 00:00:00 +0530 Sat, 28 Feb 2015 10:44:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=5019 Liability to pay retrenchment compensation under section 25FF of the Industrial Disputes Act, 1947, arising only on transfer of an undertaking, is not an allowable deduction in computing business profits if it is still contingent when the accounts are made up. The obligation is not a present debt incurred in the course of carrying on the business; it becomes enforceable only on the transfer event. A contingent provision is not a proper business outgoing under mercantile accounting, and expenditure that springs from the transfer of the business itself is outside allowable deduction provisions. Case-Laws Income Tax Thu, 20 Apr 1967 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=5019