https://www.taxtmi.com/caselaws?id=6452 Compensation paid for voluntary termination of a managing agency before expiry of the contractual term was treated as capital expenditure because it secured a recurring annual saving and an advantage of enduring nature, without any material showing business necessity, negligence, inefficiency, or loss. Applying the tests of enduring benefit, fixed capital versus circulating capital, and the character of the payment in relation to the business framework, the Court held the outlay to be capital in nature. It was therefore not allowable as a revenue deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922. en-us Thu, 04 Sep 1975 00:00:00 +0530 Fri, 05 Dec 2008 00:00:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6452 Compensation paid for voluntary termination of a managing agency before expiry of the contractual term was treated as capital expenditure because it secured a recurring annual saving and an advantage of enduring nature, without any material showing business necessity, negligence, inefficiency, or loss. Applying the tests of enduring benefit, fixed capital versus circulating capital, and the character of the payment in relation to the business framework, the Court held the outlay to be capital in nature. It was therefore not allowable as a revenue deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922. Case-Laws Income Tax Thu, 04 Sep 1975 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6452