https://www.taxtmi.com/caselaws?id=8375 For business expenditure deductibility, the decisive test is whether the outlay was incurred wholly and exclusively for business purposes, not merely whether it was commercially motivated. Retrenchment compensation and alleged gratuity payments were disallowed because no settled gratuity practice or employee expectation was proved, and the payments were linked to the share sale and transfer of management rather than to a business necessity. By contrast, commutation of pension liability was deductible because it discharged an existing business obligation, and compensation paid to a managing director in lieu of six months' notice was also deductible because it arose from the contractual terms of appointment. en-us Thu, 05 Feb 1970 00:00:00 +0530 Fri, 10 Apr 2009 18:04:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8375 For business expenditure deductibility, the decisive test is whether the outlay was incurred wholly and exclusively for business purposes, not merely whether it was commercially motivated. Retrenchment compensation and alleged gratuity payments were disallowed because no settled gratuity practice or employee expectation was proved, and the payments were linked to the share sale and transfer of management rather than to a business necessity. By contrast, commutation of pension liability was deductible because it discharged an existing business obligation, and compensation paid to a managing director in lieu of six months' notice was also deductible because it arose from the contractual terms of appointment. Case-Laws Income Tax Thu, 05 Feb 1970 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8375