https://www.taxtmi.com/caselaws?id=7991 Under the mercantile system, a bonus liability becomes deductible when it is finally settled by agreement or industrial adjudication, because that is when the enforceable liability accrues; the bonus claim for the earlier year was therefore deductible in the accounting year 1949. By contrast, leave wages payable under the Factories Act accrue only when the worker actually takes leave, is discharged, or quits after leave is refused; until then the obligation is contingent, and a reserve or anticipatory debit is not allowable as a deduction. The bonus claim was allowed, while the leave wages claim was disallowed. en-us Tue, 10 Mar 1970 00:00:00 +0530 Thu, 26 Mar 2009 18:32:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7991 Under the mercantile system, a bonus liability becomes deductible when it is finally settled by agreement or industrial adjudication, because that is when the enforceable liability accrues; the bonus claim for the earlier year was therefore deductible in the accounting year 1949. By contrast, leave wages payable under the Factories Act accrue only when the worker actually takes leave, is discharged, or quits after leave is refused; until then the obligation is contingent, and a reserve or anticipatory debit is not allowable as a deduction. The bonus claim was allowed, while the leave wages claim was disallowed. Case-Laws Income Tax Tue, 10 Mar 1970 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7991