Supreme Court of India · 1961-12-20
GORDON WOODROFFEE LEATHER MANUFACTURING CO. vs THE COMMISSIONER OF INCOME-TAX, MADRAS
- Citation / case number
- SC 1961/128
- Court
- Supreme Court of India
- Petitioner
- GORDON WOODROFFEE LEATHER MANUFACTURING CO.
- Respondent
- THE COMMISSIONER OF INCOME-TAX, MADRAS
- Author
- SINHA, BHUVNESHWAR P.(),KAPURL.,HIDAYATULLAH, M.,SHAHC.,MUDHOLKARR.
- Bench
- SINHA, BHUVNESHWAR P.(CJ),KAPUR, J.L.,HIDAYATULLAH, M.,SHAH, J.C.,MUDHOLKAR, J.R.
Judgment text excerpt
The Supreme Court ruled that the payment of Rs. 40,000 as gratuity to a director upon resignation does not qualify for deduction under Section 10(2)(xv) of the Income-tax Act, 1922. The Court held that the payment was voluntary and not made in accordance with any established scheme, nor was it expected by the recipient as a gratuity for long service. The judgment clarified that deductions under the cited section require a practice affecting salary or commercial expediency, which was absent in this case.