https://www.taxtmi.com/caselaws?id=8915 Gratuity paid to employees is deductible as business expenditure only if it is shown to have been laid out wholly and exclusively for the purposes of the business. A mere payment made in the course of business is insufficient; the relevant test is whether the payment was made on grounds of commercial expediency, as part of a remuneration practice, or to facilitate the future conduct of the business. On the facts noted, there was no prior gratuity scheme, no uniform practice, no pre-existing obligation, and no consistent basis linked to service or salary. The payments were described as ex gratia and were treated as ad hoc, so the deduction claim failed under section 10(2)(xv) of the Indian Income-tax Act, 1922. en-us Wed, 07 Feb 1973 00:00:00 +0530 Wed, 17 Jun 2009 11:09:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8915 Gratuity paid to employees is deductible as business expenditure only if it is shown to have been laid out wholly and exclusively for the purposes of the business. A mere payment made in the course of business is insufficient; the relevant test is whether the payment was made on grounds of commercial expediency, as part of a remuneration practice, or to facilitate the future conduct of the business. On the facts noted, there was no prior gratuity scheme, no uniform practice, no pre-existing obligation, and no consistent basis linked to service or salary. The payments were described as ex gratia and were treated as ad hoc, so the deduction claim failed under section 10(2)(xv) of the Indian Income-tax Act, 1922. Case-Laws Income Tax Wed, 07 Feb 1973 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8915