https://www.taxtmi.com/caselaws?id=22321 Gratuity and compensation paid to workers on closure of a business were held not deductible under section 37(1) because the expenditure was incurred after the business had ceased, not in the course of carrying on an ongoing business. The legal test applied was whether the payment was for the purpose of business; a payment made on cessation of business does not satisfy that requirement. Authorities allowing gratuity deductions were distinguished on the basis that they involved a continuing business and commercial expediency, which was not the factual position accepted on the reference. en-us Wed, 19 Jun 1991 00:00:00 +0530 Wed, 09 Dec 2009 11:51:18 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=22321 Gratuity and compensation paid to workers on closure of a business were held not deductible under section 37(1) because the expenditure was incurred after the business had ceased, not in the course of carrying on an ongoing business. The legal test applied was whether the payment was for the purpose of business; a payment made on cessation of business does not satisfy that requirement. Authorities allowing gratuity deductions were distinguished on the basis that they involved a continuing business and commercial expediency, which was not the factual position accepted on the reference. Case-Laws Income Tax Wed, 19 Jun 1991 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=22321