Section 25FF of the Industrial Disputes Act, 1947

Section 25FF of the Industrial Disputes Act, 1947 — the law in short

What the courts have decided on section 25FF of the Industrial Disputes Act, 1947, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• CIT v Gemini Cashew Sales Corporation Supreme CourtHelps department
  Our firm dissolved and the business passed to the surviving partner. Can the firm deduct the retrenchment compensation that became payable to the workmen on that transfer?
  No. The Supreme Court held that Rs 1,41,506 debited as gratuity payable to workers was not allowable, either as a deduction in computing business profits under section 10(1) or as expenditure under section 10(2)(xv) of the 1922 Act. Liability to pay retrenchment compensation on a transfer of an undertaking arises on the transfer and not before; while the business continues the workmen's right is contingent, since a workman may resign, die or retire. The liability therefore arose not in the course of the business nor for the purpose of carrying it on, but from the transfer, and was not of a revenue nature.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.