https://www.taxtmi.com/caselaws?id=796677 Compensation paid by a co-producer and director to settle film-production litigation was treated as business expenditure where the liability arose from professional obligations connected with timely project completion and commercial litigation in which the individual was personally impleaded. Consent terms and later judicial payment directions established that the liability had crystallised and had a sufficient professional nexus. The expenditure's true character, rather than its incorrect classification as bad debt in the return, governed deductibility. Lack of direct contractual privity under a later memorandum, earlier denial of liability, absence of recipient income, and the recipient's relationship with a production partner did not negate that nexus. Deduction was available under Section 37(1). en-us Mon, 03 Aug 2026 00:00:00 +0530 Sat, 08 Aug 2026 08:32:14 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=796677 Compensation paid by a co-producer and director to settle film-production litigation was treated as business expenditure where the liability arose from professional obligations connected with timely project completion and commercial litigation in which the individual was personally impleaded. Consent terms and later judicial payment directions established that the liability had crystallised and had a sufficient professional nexus. The expenditure's true character, rather than its incorrect classification as bad debt in the return, governed deductibility. Lack of direct contractual privity under a later memorandum, earlier denial of liability, absence of recipient income, and the recipient's relationship with a production partner did not negate that nexus. Deduction was available under Section 37(1). Case-Laws Income Tax Mon, 03 Aug 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=796677