https://www.taxtmi.com/caselaws?id=168229 Estimated warranty costs on vehicles sold were deductible in the year of sale because the expenditure was treated as incurred once the taxpayer became definitively committed to the liability. Although the warranty obligation was expressed in contingent terms and depended on defects being notified within the warranty period, the commercial facts showed an existing and ascertainable level of defects at sale and allowed the remedial cost to be reasonably estimated. The analysis distinguished the tax subject matter on business profits from the deduction rules, and applied the principle that theoretical contingency does not prevent accrual where the liability is, in substance, sufficiently fixed. en-us Tue, 03 Oct 1995 00:00:00 +0530 Wed, 04 Feb 2015 16:48:07 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=168229 Estimated warranty costs on vehicles sold were deductible in the year of sale because the expenditure was treated as incurred once the taxpayer became definitively committed to the liability. Although the warranty obligation was expressed in contingent terms and depended on defects being notified within the warranty period, the commercial facts showed an existing and ascertainable level of defects at sale and allowed the remedial cost to be reasonably estimated. The analysis distinguished the tax subject matter on business profits from the deduction rules, and applied the principle that theoretical contingency does not prevent accrual where the liability is, in substance, sufficiently fixed. Case-Laws Income Tax Tue, 03 Oct 1995 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=168229