Compensation for Continuing Job Contract Work is allowable Business Expense

Farseen Rubber Industries Limited. Vs DCIT (ITAT Kolkata) Income Tax Appellate Tribunal (ITAT) Kolkata, in a recent ruling, overturned the decision of the Commissioner of Income Tax (Appeals) and the Assessing Officer, allowing Farseen Rubber Industries Limited to claim a deduction of Rs. 1 crore paid as compensation to M/s. JK Tyre & Industries Limited. The dispute centered on whether this expenditure fell under the ambit of Explanation 1 to Section 37 of the Income Tax Act, which disallows expenses incurred for purposes considered an offense or prohibited by law. Farseen Rubber Industrie...