https://www.taxtmi.com/caselaws?id=289408 Business expenditure is deductible only where the assessee shows a direct and proximate connection with business and that the outlay was incurred wholly and exclusively for business purposes. Salaries and bonuses paid to employees during jail custody were treated as non-deductible to the extent they were motivated by extra-commercial considerations, except for periods when leave salary was contractually payable. A payment of Rs. 2,50,000 to the U.P. Government was also not allowable because the assessee failed to prove that it was a genuine business outlay; at best, it was linked remotely to avoiding possible criminal proceedings or purchasing peace. The deductions were therefore disallowed. en-us Fri, 16 Sep 1966 00:00:00 +0530 Wed, 29 Jul 2020 13:53:44 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=289408 Business expenditure is deductible only where the assessee shows a direct and proximate connection with business and that the outlay was incurred wholly and exclusively for business purposes. Salaries and bonuses paid to employees during jail custody were treated as non-deductible to the extent they were motivated by extra-commercial considerations, except for periods when leave salary was contractually payable. A payment of Rs. 2,50,000 to the U.P. Government was also not allowable because the assessee failed to prove that it was a genuine business outlay; at best, it was linked remotely to avoiding possible criminal proceedings or purchasing peace. The deductions were therefore disallowed. Case-Laws Income Tax Fri, 16 Sep 1966 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=289408