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1961 (12) TMI 4 - SUPREME COURT
Whether the sum of ₹ 40,000 paid to Mr. J. H. Philips on his retirement from the service of the company was not an admissible deduction under section 10(2)(xv) of the Income-tax Act, 1922 ?
Held that:- The proper test to apply in this case is, was the payment made as a matter of practice which affected the quantum of salary or was there an expectation by the employee of getting a gratuity or was the sum of money expended on the ground of commercial expediency and in order indirectly to facilitate the carrying on of the business. But this has not been shown and therefore the amount claimed is not a deductible item under section 10(2)(xv). Appeal dismissed.