S. 37 Retrenchment Compensation paid for business purpose is allowable

ACIT Vs M/s. Lumax Automotive Systems Ltd. (ITAT Delhi) The assessee-company explained that it has closed down its Aurangabad unit due to heavy losses suffered by the assessee-company. The assessee-company in this year has declared loss of Rs.4.34 crores in the return of income and after making addition as well, the net taxable loss have been determined at Rs.3.77 crores. Therefore, the contention of the assessee-company is correct that in order to save future losses, Aurangabad unit was closed down by the assessee-company. The closure is approved by the Board of Directors and there was an Agr...