https://www.taxtmi.com/caselaws?id=189328 Compensation paid to employees on closure of the banking business was not an allowable deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922, because it was incurred after the business had closed and was not shown to have been laid out for carrying on the trade. No legal obligation to pay such compensation on closure was established, so the payment was treated as a voluntary gesture rather than a business necessity. Expenditure incurred for winding up or closing the business does not satisfy the statutory requirement of being wholly and exclusively for the purpose of the business. The absence of proof that the amount was expended during the accounting year also militated against allowance. en-us Tue, 27 Feb 1962 00:00:00 +0530 Thu, 05 Jan 2017 18:33:52 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=189328 Compensation paid to employees on closure of the banking business was not an allowable deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922, because it was incurred after the business had closed and was not shown to have been laid out for carrying on the trade. No legal obligation to pay such compensation on closure was established, so the payment was treated as a voluntary gesture rather than a business necessity. Expenditure incurred for winding up or closing the business does not satisfy the statutory requirement of being wholly and exclusively for the purpose of the business. The absence of proof that the amount was expended during the accounting year also militated against allowance. Case-Laws Income Tax Tue, 27 Feb 1962 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=189328