https://www.taxtmi.com/caselaws?id=39341 Reimbursement by a company of its auditors' defence costs in disciplinary proceedings was not deductible as business expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922. The court applied the statutory test that the payment must be laid out wholly and exclusively for the purposes of the business and must not be capital or personal expenditure. Because the proceedings concerned the auditors' own conduct in certifying accounts, and did not affect the company's trading activity, assets, or reputation, the expenditure was treated as personal to the auditors rather than incidental to the company's business. Authorisation in the articles of association did not satisfy the tax deduction test. en-us Thu, 20 Nov 1975 00:00:00 +0530 Thu, 15 Apr 2010 17:03:50 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39341 Reimbursement by a company of its auditors' defence costs in disciplinary proceedings was not deductible as business expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922. The court applied the statutory test that the payment must be laid out wholly and exclusively for the purposes of the business and must not be capital or personal expenditure. Because the proceedings concerned the auditors' own conduct in certifying accounts, and did not affect the company's trading activity, assets, or reputation, the expenditure was treated as personal to the auditors rather than incidental to the company's business. Authorisation in the articles of association did not satisfy the tax deduction test. Case-Laws Income Tax Thu, 20 Nov 1975 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39341