https://www.taxtmi.com/caselaws?id=11300 A contractual assumption of the transferor's accrued gratuity liability, taken over by the purchaser as part of the bargain for acquiring an undertaking, forms part of the purchase consideration and the actual cost of acquisition. The liability was an existing obligation up to the date of transfer, so its discharge by the purchaser was capital in nature and could be distributed among the acquired assets for depreciation purposes. The monetary price could not be treated as the sole consideration, because the true transfer value also included the assumed gratuity obligation. The resulting principle is that such an accrued transferor liability is not revenue expenditure but part of acquisition cost. en-us Thu, 26 Jun 2003 00:00:00 +0530 Thu, 06 Aug 2009 10:39:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=11300 A contractual assumption of the transferor's accrued gratuity liability, taken over by the purchaser as part of the bargain for acquiring an undertaking, forms part of the purchase consideration and the actual cost of acquisition. The liability was an existing obligation up to the date of transfer, so its discharge by the purchaser was capital in nature and could be distributed among the acquired assets for depreciation purposes. The monetary price could not be treated as the sole consideration, because the true transfer value also included the assumed gratuity obligation. The resulting principle is that such an accrued transferor liability is not revenue expenditure but part of acquisition cost. Case-Laws Income Tax Thu, 26 Jun 2003 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=11300