https://www.taxtmi.com/caselaws?id=7942 Litigation expenses are deductible only if incurred wholly and exclusively for carrying on or protecting the business. Where the suit is aimed at recovering compensation for cancellation of a liquor licence and stoppage of business, the claim is treated as compensation for loss of a source of income and for sterilisation of the profit-making apparatus. In that situation, the expenditure is capital in character and is not allowable as revenue expenditure, even if the damages are measured by reference to lost profits. Claims directed to preserve trading operations are distinguishable from claims for capital compensation. en-us Tue, 17 Dec 1968 00:00:00 +0530 Tue, 24 Mar 2009 17:56:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7942 Litigation expenses are deductible only if incurred wholly and exclusively for carrying on or protecting the business. Where the suit is aimed at recovering compensation for cancellation of a liquor licence and stoppage of business, the claim is treated as compensation for loss of a source of income and for sterilisation of the profit-making apparatus. In that situation, the expenditure is capital in character and is not allowable as revenue expenditure, even if the damages are measured by reference to lost profits. Claims directed to preserve trading operations are distinguishable from claims for capital compensation. Case-Laws Income Tax Tue, 17 Dec 1968 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7942