Book adjustment payments: no disallowance where payment offsets a payee's liability for goods or services rendered. No disallowance applies where payment is made by way of adjustment against any liability incurred by the payee for goods supplied or services rendered by the assessee; payments that extinguish the payee's liability by book adjustment are excluded from the disallowance provision and are treated as permitted settlements for tax purposes.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Book adjustment payments: no disallowance where payment offsets a payee's liability for goods or services rendered.
No disallowance applies where payment is made by way of adjustment against any liability incurred by the payee for goods supplied or services rendered by the assessee; payments that extinguish the payee's liability by book adjustment are excluded from the disallowance provision and are treated as permitted settlements for tax purposes.
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