COMMISSIONER OF INCOME-TAX, MADRAS vs M/S. ASHOK LEYLAND LTD.

The Supreme Court held that the payment made by the respondent company for terminating the managing agency was a revenue expenditure under the Indian Income-tax Act, 1922, specifically Section 66(2). The Court reasoned that the termination was based on business considerations and commercial expediency, and did not result in the acquisition of an enduring benefit or income-yielding asset. Thus, the High Court's decision to allow the deduction was upheld, dismissing the appeal by the Commissioner of Income-tax.