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TMI Blog1991 (7) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... er, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sum of Rs. 12,171, being the arrears of urban land tax, is an admissible expenditure for the assessment year 1973-74 even though the tax related to the earlier years ? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sum of Rs. 2,481, being the notice pay to workers voluntarily retired should be allowed as deduction for the assessment year 1973-74 ? " (only in T. C. No. 1003 of 1980). In so far as the first question is concerned, learned counsel for the Revenue now represents that he has been instructed not to press for an answer on this question and we, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of business expediency and hence allowable as claimed by the assessee. That is how the third question referred to above has come up before us. There is no dispute that, during the accounting period relevant to the assessment year 1973-74, the assessee had sustained losses and had wanted, by reducing the staff, to bring a reorganisation of the branch, saving on the wage bill as well. Under the standing orders, provision is made for a voluntary retirement scheme and it is stated that, in all such cases of voluntary retirement, the quantum of benefits will be as for retrenchment as per the Industrial Disputes Act. Though voluntary retirement, under the provisions of the Industrial Disputes Act, cannot be regarded as retrenchment, yet, unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ationship with labour and the expenditure has to be considered as having been laid out wholly and exclusively for business purposes of the assessee. A reference in this connection may be made to Sassoon J. David and Co. P. Ltd. v. CIT [1979] 118 ITR 261 (SC), where the Supreme Court stated that it is too late in the day now to treat the expenditure incurred by a management in paying reasonable sums by way of compensation for termination of service as not business expenditure . It is also significant that it is not the stand of the Revenue that the sum of Rs. 2,481 representing the payment of notice pay to the nine workmen is not reasonable. Therefore, the third question is answered in the affirmative and against the Revenue. There will be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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