https://www.taxtmi.com/caselaws?id=289184 A first-time gratuity payment to an employee on retirement was held not deductible as business expenditure under section 10(2)(xv) of the Income-tax Act, 1922. The court applied the test that such a payment must be shown to arise from an established business practice affecting remuneration, an employee's expectation based on lower salary, or commercial expediency connected with the business. On the facts, there was no scheme, no prior practice, and no evidence that the employee accepted reduced remuneration in anticipation of gratuity. The assessee therefore failed to discharge the burden of proving entitlement to deduction, and the reference was answered against it. en-us Mon, 10 Sep 1962 00:00:00 +0530 Sat, 18 Jul 2020 13:26:31 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=289184 A first-time gratuity payment to an employee on retirement was held not deductible as business expenditure under section 10(2)(xv) of the Income-tax Act, 1922. The court applied the test that such a payment must be shown to arise from an established business practice affecting remuneration, an employee's expectation based on lower salary, or commercial expediency connected with the business. On the facts, there was no scheme, no prior practice, and no evidence that the employee accepted reduced remuneration in anticipation of gratuity. The assessee therefore failed to discharge the burden of proving entitlement to deduction, and the reference was answered against it. Case-Laws Income Tax Mon, 10 Sep 1962 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=289184