https://www.taxtmi.com/caselaws?id=6935 Unpaid and disputed sales tax was not deductible as a business expense because deduction under section 10(2)(xv) requires an actual expenditure laid out or expended for business purposes. A liability merely assessed by the revenue authorities, but disputed as to quantum and validity and neither paid nor provided for, remains contingent and does not qualify as incurred expenditure. The mercantile system of accounting does not override this statutory requirement, and section 10(2A) applies only where an allowance or deduction has already been made in respect of a liability incurred and later remitted or ceased. The sales tax claim therefore fell outside the permitted allowances and was not deductible. en-us Wed, 24 Aug 1966 00:00:00 +0530 Sat, 07 Feb 2009 10:50:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6935 Unpaid and disputed sales tax was not deductible as a business expense because deduction under section 10(2)(xv) requires an actual expenditure laid out or expended for business purposes. A liability merely assessed by the revenue authorities, but disputed as to quantum and validity and neither paid nor provided for, remains contingent and does not qualify as incurred expenditure. The mercantile system of accounting does not override this statutory requirement, and section 10(2A) applies only where an allowance or deduction has already been made in respect of a liability incurred and later remitted or ceased. The sales tax claim therefore fell outside the permitted allowances and was not deductible. Case-Laws Income Tax Wed, 24 Aug 1966 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6935