https://www.taxtmi.com/caselaws?id=266626 Under the mercantile system, interest on disputed damages is deductible only when the liability has crystallised into a present, enforceable obligation. Where the assessee continues to contest the damages and the decree awarding them remains stayed, there is no legally enforceable liability in the relevant years and no corresponding right in the claimant to receive interest. On that basis, the interest claimed on the disputed damages was not allowable as a business deduction for the years under consideration. Section 40(a)(i) did not independently assist the assessee once the basic deduction requirement failed. en-us Fri, 16 Oct 2015 00:00:00 +0530 Sat, 05 Mar 2016 18:21:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=266626 Under the mercantile system, interest on disputed damages is deductible only when the liability has crystallised into a present, enforceable obligation. Where the assessee continues to contest the damages and the decree awarding them remains stayed, there is no legally enforceable liability in the relevant years and no corresponding right in the claimant to receive interest. On that basis, the interest claimed on the disputed damages was not allowable as a business deduction for the years under consideration. Section 40(a)(i) did not independently assist the assessee once the basic deduction requirement failed. Case-Laws Income Tax Fri, 16 Oct 2015 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=266626