https://www.taxtmi.com/caselaws?id=49733 Legal expenses incurred in defending a criminal prosecution are deductible only if they are laid out wholly and exclusively for business purposes. The Court held that the relevant test depends on the nature and purpose of the proceeding, not on the eventual outcome of the prosecution. Because the defence expenses arose from a criminal prosecution involving the risk of conviction and statutory punishment, the Tribunal had erred in treating imprisonment or fine as negligible. The expenditure was therefore not allowable as business expenditure under the Income-tax Act and the question was answered against the taxpayer. en-us Fri, 17 Apr 1953 00:00:00 +0530 Mon, 25 Jul 2022 12:34:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=49733 Legal expenses incurred in defending a criminal prosecution are deductible only if they are laid out wholly and exclusively for business purposes. The Court held that the relevant test depends on the nature and purpose of the proceeding, not on the eventual outcome of the prosecution. Because the defence expenses arose from a criminal prosecution involving the risk of conviction and statutory punishment, the Tribunal had erred in treating imprisonment or fine as negligible. The expenditure was therefore not allowable as business expenditure under the Income-tax Act and the question was answered against the taxpayer. Case-Laws Income Tax Fri, 17 Apr 1953 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=49733