https://www.taxtmi.com/caselaws?id=10229 Where a transferee takes over an ascertained gratuity liability relating to employees' pre-transfer service as part of the acquisition of a business undertaking, the liability is treated as embedded in the purchase cost and its later discharge is capital in nature. The Madras HC noted that the obligation was capable of actuarial valuation on the date of transfer and formed part of the fixed consideration for the transfer of the unit with assets and liabilities. The payment was therefore not a deductible revenue expense, and the disallowance was upheld against the assessee. en-us Mon, 28 Jan 2008 00:00:00 +0530 Sat, 11 Jul 2009 09:41:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=10229 Where a transferee takes over an ascertained gratuity liability relating to employees' pre-transfer service as part of the acquisition of a business undertaking, the liability is treated as embedded in the purchase cost and its later discharge is capital in nature. The Madras HC noted that the obligation was capable of actuarial valuation on the date of transfer and formed part of the fixed consideration for the transfer of the unit with assets and liabilities. The payment was therefore not a deductible revenue expense, and the disallowance was upheld against the assessee. Case-Laws Income Tax Mon, 28 Jan 2008 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=10229