https://www.taxtmi.com/caselaws?id=5203 Retrenchment compensation, termination compensation and related annuity payments made by a continuing business to employees and a former director were treated as deductible business expenditure where they were incurred to restructure staff and reduce future wage liability. The Supreme Court applied the commercial expediency test under section 10(2)(xv) of the Indian Income-tax Act, 1922, holding that expenditure is allowable if laid out wholly and exclusively for the assessee's business. It also clarified that "wholly and exclusively" does not mean "necessarily", and incidental benefit to share purchasers did not change the business character of the payments. The disallowance was accordingly rejected. en-us Thu, 03 May 1979 00:00:00 +0530 Thu, 07 Jun 2018 15:05:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=5203 Retrenchment compensation, termination compensation and related annuity payments made by a continuing business to employees and a former director were treated as deductible business expenditure where they were incurred to restructure staff and reduce future wage liability. The Supreme Court applied the commercial expediency test under section 10(2)(xv) of the Indian Income-tax Act, 1922, holding that expenditure is allowable if laid out wholly and exclusively for the assessee's business. It also clarified that "wholly and exclusively" does not mean "necessarily", and incidental benefit to share purchasers did not change the business character of the payments. The disallowance was accordingly rejected. Case-Laws Income Tax Thu, 03 May 1979 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=5203