https://www.taxtmi.com/caselaws?id=78175 Prior period expenditure is deductible only when the corresponding liability crystallizes and becomes enforceable, not merely because the underlying services or expenses relate to an earlier year. On the facts, the obligation arose under an agreement executed in August 2002 with retrospective effect, so the assessee could claim the deduction when that liability came into existence. The distinction from contingent liability cases was material, because the issue here was the year of crystallisation, not mere accrual of an estimated obligation. The prior period disallowance was therefore unsustainable, and the deduction was allowable in assessment year 2003-04. en-us Wed, 08 Sep 2010 00:00:00 +0530 Wed, 19 Nov 2025 17:01:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=78175 Prior period expenditure is deductible only when the corresponding liability crystallizes and becomes enforceable, not merely because the underlying services or expenses relate to an earlier year. On the facts, the obligation arose under an agreement executed in August 2002 with retrospective effect, so the assessee could claim the deduction when that liability came into existence. The distinction from contingent liability cases was material, because the issue here was the year of crystallisation, not mere accrual of an estimated obligation. The prior period disallowance was therefore unsustainable, and the deduction was allowable in assessment year 2003-04. Case-Laws Income Tax Wed, 08 Sep 2010 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=78175