https://www.taxtmi.com/caselaws?id=166260 Whether a gratuity reserve credited at the end of the previous year constituted an ascertained liability under section 25F is answered by distinguishing liabilities in praesenti from contingent future liabilities: a mere general reserve retained under the assessee's control and not earmarked or transferred does not constitute expenditure and is not deductible. The statutory obligation to pay retrenchment compensation is contingent on future events and, absent a fair, scientific valuation or actual payment, the three established tests - proper revenue expense, fair estimate of amount accrued, and actual expenditure - are not met; accordingly the reserve is not deductible. en-us Wed, 12 Sep 1962 00:00:00 +0530 Mon, 08 Sep 2014 17:49:24 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=166260 Whether a gratuity reserve credited at the end of the previous year constituted an ascertained liability under section 25F is answered by distinguishing liabilities in praesenti from contingent future liabilities: a mere general reserve retained under the assessee's control and not earmarked or transferred does not constitute expenditure and is not deductible. The statutory obligation to pay retrenchment compensation is contingent on future events and, absent a fair, scientific valuation or actual payment, the three established tests - proper revenue expense, fair estimate of amount accrued, and actual expenditure - are not met; accordingly the reserve is not deductible. Case-Laws Income Tax Wed, 12 Sep 1962 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=166260