1990 (1) TMI 312

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....in holding that the sum of ₹ 4,03,000 paid by the assessee company to Vulcan Industries for premature termination of the agreement between them was revenue expenditure of the assessee?" "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of 25.03,000 representing actuarially valued liability for gratuity for the year 1976 was not an allowable deduction in computing the total income of the assessee company for the asst. yr. 1977-78 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the commission payments of ₹ 70,667 to senior management staff were required to taken into consideration for the purpose of ....

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....yment that was made under the agreement was of revenue nature and after the agreement was terminated, the payment that was made, did not bring into existence any capital of enduring nature. The while expenditure was on the revenue account. The contract was entered into in course of the usual business and the termination was made as the assessee thought it as the business prudence required it. When such a termination was made and such usual termination compensation was paid, this termination did not affect in any manner whatsoever the framework of the business as also the pattern of the business of the assessee. 5. The Supreme Court in the case of the CIT vs. Ashok Leyland Ltd. reported in 1973 CTR (SC) 9: (1972) 86 ITR 549(SC) observed as ....