https://www.taxtmi.com/caselaws?id=49216 A payment made by a bank in settlement of an admitted liability for lost pledged jewellery constituted business expenditure because it was a real outlay in discharge of the bank's obligation, not a mere forbearance to recover advances. The expenditure also satisfied the business-purpose test: the bank made the compromise to preserve goodwill, maintain customer relations, and protect its banking business, rather than for any extraneous purpose. On that reasoning, such settlement payments were deductible under the relevant business expenditure provision, and the disallowance of the claim could not be sustained. en-us Thu, 15 Sep 1966 00:00:00 +0530 Mon, 03 Nov 2025 16:41:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=49216 A payment made by a bank in settlement of an admitted liability for lost pledged jewellery constituted business expenditure because it was a real outlay in discharge of the bank's obligation, not a mere forbearance to recover advances. The expenditure also satisfied the business-purpose test: the bank made the compromise to preserve goodwill, maintain customer relations, and protect its banking business, rather than for any extraneous purpose. On that reasoning, such settlement payments were deductible under the relevant business expenditure provision, and the disallowance of the claim could not be sustained. Case-Laws Income Tax Thu, 15 Sep 1966 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=49216