https://www.taxtmi.com/caselaws?id=184447 On the mercantile system, an expenditure becomes deductible only when the liability is ascertained, not when it is merely contingent or vague. The assessee's liability for evaded insurance premium arose under the War Risks (Goods) Insurance Ordinance, 1940, but the exact amount could be determined only by the authorised officer under the scheme. As the sum was both quantified and paid during the relevant accounting year, it was an ascertained liability of that year and could not be attributed to earlier years. The deduction was therefore allowable in the relevant assessment year, in favour of the assessee. en-us Thu, 19 Dec 1957 00:00:00 +0530 Fri, 08 Jul 2016 18:11:20 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=184447 On the mercantile system, an expenditure becomes deductible only when the liability is ascertained, not when it is merely contingent or vague. The assessee's liability for evaded insurance premium arose under the War Risks (Goods) Insurance Ordinance, 1940, but the exact amount could be determined only by the authorised officer under the scheme. As the sum was both quantified and paid during the relevant accounting year, it was an ascertained liability of that year and could not be attributed to earlier years. The deduction was therefore allowable in the relevant assessment year, in favour of the assessee. Case-Laws Income Tax Thu, 19 Dec 1957 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=184447