https://www.taxtmi.com/caselaws?id=6262 Under the mercantile system, an accrued statutory liability is deductible in computing business income in the year it arises, even if payment is deferred or the liability is disputed. Sales tax liability is treated as arising when the taxable sales or purchases occur, and pending assessment or appeal does not postpone its legal enforceability. Failure to record the liability in the books does not bar deduction, because entitlement depends on the statutory accrual of the liability rather than accounting entries. An accrued and legally payable sales tax amount therefore qualifies as an allowable business outgoing for income-tax purposes. en-us Tue, 17 Aug 1971 00:00:00 +0530 Wed, 11 Jun 2025 14:14:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6262 Under the mercantile system, an accrued statutory liability is deductible in computing business income in the year it arises, even if payment is deferred or the liability is disputed. Sales tax liability is treated as arising when the taxable sales or purchases occur, and pending assessment or appeal does not postpone its legal enforceability. Failure to record the liability in the books does not bar deduction, because entitlement depends on the statutory accrual of the liability rather than accounting entries. An accrued and legally payable sales tax amount therefore qualifies as an allowable business outgoing for income-tax purposes. Case-Laws Income Tax Tue, 17 Aug 1971 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6262