https://www.taxtmi.com/caselaws?id=19501 Reasonable gratuity paid to an ex-working director may be deductible as business expenditure where it is made under an established company practice, has a real business nexus, and is commercially expedient. Voluntary character alone does not disqualify the outlay. The analysis treats gratuity, bonus, retrenchment compensation, and termination compensation as potentially allowable when the payment is reasonable and facilitates the carrying on of the business. On the facts discussed, the director had served the company for over two decades, the practice of paying gratuity was established and later affirmed by board resolution, and the deduction was accepted in favour of the assessee. en-us Tue, 19 Apr 1994 00:00:00 +0530 Fri, 06 Nov 2009 16:11:27 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=19501 Reasonable gratuity paid to an ex-working director may be deductible as business expenditure where it is made under an established company practice, has a real business nexus, and is commercially expedient. Voluntary character alone does not disqualify the outlay. The analysis treats gratuity, bonus, retrenchment compensation, and termination compensation as potentially allowable when the payment is reasonable and facilitates the carrying on of the business. On the facts discussed, the director had served the company for over two decades, the practice of paying gratuity was established and later affirmed by board resolution, and the deduction was accepted in favour of the assessee. Case-Laws Income Tax Tue, 19 Apr 1994 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=19501