https://www.taxtmi.com/caselaws?id=20675 Retrenchment compensation paid to workmen during the continuance of business was treated as allowable business expenditure under section 37(1) of the Income-tax Act, 1961, because the liability arose when retrenchment occurred in the course of ongoing business and under a subsisting contract. Compensation payable under section 25F of the Industrial Disputes Act, 1947, was held to be deductible when the obligation had accrued in praesenti and was not a mere contingent provision. As the assessee followed the mercantile system, the deduction was allowable in the year of accrual, and not as a closure-related expense. en-us Wed, 13 Jan 1993 00:00:00 +0530 Mon, 16 Nov 2009 15:24:11 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=20675 Retrenchment compensation paid to workmen during the continuance of business was treated as allowable business expenditure under section 37(1) of the Income-tax Act, 1961, because the liability arose when retrenchment occurred in the course of ongoing business and under a subsisting contract. Compensation payable under section 25F of the Industrial Disputes Act, 1947, was held to be deductible when the obligation had accrued in praesenti and was not a mere contingent provision. As the assessee followed the mercantile system, the deduction was allowable in the year of accrual, and not as a closure-related expense. Case-Laws Income Tax Wed, 13 Jan 1993 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=20675