https://www.taxtmi.com/caselaws?id=8646 Under the mercantile system, sales tax liability becomes deductible when it is finally quantified, demanded and recognised in the accounts as a real and enforceable business obligation. Expenditure may be claimed in the year the enforceable demand is brought into account, even where the underlying sales transactions relate to earlier periods, unless the statute expressly prohibits the deduction. The distinction between income accruing during a previous year and expenditure arising from a subsequently quantified and enforceable liability is material. Accordingly, a sales tax demand debited during the relevant accounting year may be allowed as business expenditure for that year. en-us Wed, 31 May 1972 00:00:00 +0530 Tue, 20 Jan 2026 12:57:17 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8646 Under the mercantile system, sales tax liability becomes deductible when it is finally quantified, demanded and recognised in the accounts as a real and enforceable business obligation. Expenditure may be claimed in the year the enforceable demand is brought into account, even where the underlying sales transactions relate to earlier periods, unless the statute expressly prohibits the deduction. The distinction between income accruing during a previous year and expenditure arising from a subsequently quantified and enforceable liability is material. Accordingly, a sales tax demand debited during the relevant accounting year may be allowed as business expenditure for that year. Case-Laws Income Tax Wed, 31 May 1972 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8646