https://www.taxtmi.com/caselaws?id=22786 Expenditure incurred because of the closure of a business, including retrenchment compensation and gratuity paid after the decision to shut down, is not expenditure laid out wholly and exclusively for carrying on the business under section 37(1) of the Income-tax Act, 1961. Where the contemporaneous documents show a decision to close the undertaking, later winding-up steps such as notices to workmen, completion of pending orders, billing, collection, and accounting adjustments do not change the character of the liability. Such payments remain attributable to closure, not to the conduct of the business, and are therefore not deductible revenue expenditure. en-us Fri, 06 Jul 1990 00:00:00 +0530 Mon, 14 Dec 2009 10:48:05 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=22786 Expenditure incurred because of the closure of a business, including retrenchment compensation and gratuity paid after the decision to shut down, is not expenditure laid out wholly and exclusively for carrying on the business under section 37(1) of the Income-tax Act, 1961. Where the contemporaneous documents show a decision to close the undertaking, later winding-up steps such as notices to workmen, completion of pending orders, billing, collection, and accounting adjustments do not change the character of the liability. Such payments remain attributable to closure, not to the conduct of the business, and are therefore not deductible revenue expenditure. Case-Laws Income Tax Fri, 06 Jul 1990 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=22786