https://www.taxtmi.com/caselaws?id=37266 A sum deposited with a transferee-bank for future gratuity payments to employees was not deductible under section 37(1) of the Income-tax Act, 1961, because it was not an actual payment in discharge of a present accrued liability. After transfer of the banking business, the assessee was treated as not carrying on that business merely by retaining income-yielding assets, so interest, rent, or dividend receipts did not alter the position. The deposit was viewed as a fund kept to meet a future contingency rather than expenditure laid out wholly and exclusively for business purposes. The deduction was therefore disallowed. en-us Tue, 06 Mar 1979 00:00:00 +0530 Sat, 27 Mar 2010 16:58:15 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=37266 A sum deposited with a transferee-bank for future gratuity payments to employees was not deductible under section 37(1) of the Income-tax Act, 1961, because it was not an actual payment in discharge of a present accrued liability. After transfer of the banking business, the assessee was treated as not carrying on that business merely by retaining income-yielding assets, so interest, rent, or dividend receipts did not alter the position. The deposit was viewed as a fund kept to meet a future contingency rather than expenditure laid out wholly and exclusively for business purposes. The deduction was therefore disallowed. Case-Laws Income Tax Tue, 06 Mar 1979 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=37266