DALMIA JAIN & CO. LTD. vs COMMISSIONER OF INCOME-TAX,BIHAR & ORISSA, PATNA

The Supreme Court addressed the issue of whether litigation expenses of Rs. 1,29,994 incurred by the assessee for the assessment year 1951-52 could be considered as expenditure laid out wholly and exclusively for the purpose of the business under Section 10(2)(xv) of the Indian Income Tax Act, 1922. The Court held that such expenses are deductible if they are incurred in the course of business operations, affirming the Tribunal's decision that the expenses were indeed for business purposes. The appeal was thus dismissed, upholding the lower court's ruling.