https://www.taxtmi.com/caselaws?id=39662 Expenditure on defending directors, officers or employees in criminal proceedings is deductible only if it is shown, on the facts and surrounding circumstances, to have been incurred wholly and exclusively for business purposes. Criminal defence costs are not automatically allowable merely because the prosecution arose from business activity. The decisive enquiry is the assessee's motive and intention in incurring the expenditure; where extra-commercial considerations such as protecting relatives or avoiding punishment are present, the claim fails. The fact that the company itself could not be prosecuted, while proceedings were against its personnel, does not by itself make the expense deductible. en-us Fri, 12 Jul 1974 00:00:00 +0530 Mon, 19 Apr 2010 15:24:35 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=39662 Expenditure on defending directors, officers or employees in criminal proceedings is deductible only if it is shown, on the facts and surrounding circumstances, to have been incurred wholly and exclusively for business purposes. Criminal defence costs are not automatically allowable merely because the prosecution arose from business activity. The decisive enquiry is the assessee's motive and intention in incurring the expenditure; where extra-commercial considerations such as protecting relatives or avoiding punishment are present, the claim fails. The fact that the company itself could not be prosecuted, while proceedings were against its personnel, does not by itself make the expense deductible. Case-Laws Income Tax Fri, 12 Jul 1974 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=39662