https://www.taxtmi.com/caselaws?id=6434 Under the mercantile system, a deduction arises only when the liability has accrued. Where section 326 of the Companies Act, 1956 makes Central Government approval a condition precedent to a valid managing agency reappointment, no enforceable liability for remuneration accrues before that approval. The approval granted on 2 September 1957 alone made the appointment effective and the remuneration deductible in the relevant previous year, even though the approval was expressed to operate retrospectively from 1 April 1956. The retrospective language did not create an earlier liability; it followed only from the Government's approval. en-us Thu, 21 Nov 1974 00:00:00 +0530 Fri, 05 Dec 2008 00:00:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6434 Under the mercantile system, a deduction arises only when the liability has accrued. Where section 326 of the Companies Act, 1956 makes Central Government approval a condition precedent to a valid managing agency reappointment, no enforceable liability for remuneration accrues before that approval. The approval granted on 2 September 1957 alone made the appointment effective and the remuneration deductible in the relevant previous year, even though the approval was expressed to operate retrospectively from 1 April 1956. The retrospective language did not create an earlier liability; it followed only from the Government's approval. Case-Laws Income Tax Thu, 21 Nov 1974 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6434