COMMISSIONER OF INCOME-TAX, U.P. vs NAINITAL BANK LTD.

The Supreme Court held that the amounts paid by the bank to its constituents for stolen jewellery, credited against loans, qualify as 'expenditure' under Section 10(2)(xv) of the Indian Income-tax Act, 1922. The Court clarified that expenditure involves the actual payment or settlement of accounts, and the bank's actions constituted bilateral settlements rather than mere forbearance. The High Court's decision to allow the bank's claim for these amounts was upheld, affirming that the payments were indeed laid out for the purpose of business.