COMMISSIONER OF INCOME-TAX,WEST BENGAL vs H. HIRJEE.

The Supreme Court ruled that expenses incurred by a businessman in defending against criminal prosecution under the Hoarding and Profiteering Ordinance cannot be deducted under Section 10(2)(xv) of the Indian Income-tax Act, 1922, as they are not 'wholly and exclusively' for business purposes. The Court held that the Appellate Tribunal's finding was not binding as it failed to consider the potential for imprisonment, and thus the expenses were not deductible. The distinction between successful and unsuccessful defenses was emphasized, stating that the nature and purpose of the legal proceedings determine deductibility, not the outcome.