https://www.taxtmi.com/caselaws?id=9092 Under the mercantile system the provision for bonus is deductible only if it represents an accrued and enforceable liability; liability accrues when there is an employer-employee agreement, an admission of liability, or an enforceable industrial tribunal award. Absent evidence of agreement, admission or award, and where the entry is a prudent or contingent provision without a demonstrable basis, it is not an accrued legal liability and cannot be claimed as a deduction. The Tribunal's allowance of the Rs. 1,50,000 provision was therefore incorrect and the deduction is disallowed in the relevant assessment year. en-us Thu, 15 Nov 1973 00:00:00 +0530 Fri, 19 Jun 2009 13:34:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=9092 Under the mercantile system the provision for bonus is deductible only if it represents an accrued and enforceable liability; liability accrues when there is an employer-employee agreement, an admission of liability, or an enforceable industrial tribunal award. Absent evidence of agreement, admission or award, and where the entry is a prudent or contingent provision without a demonstrable basis, it is not an accrued legal liability and cannot be claimed as a deduction. The Tribunal's allowance of the Rs. 1,50,000 provision was therefore incorrect and the deduction is disallowed in the relevant assessment year. Case-Laws Income Tax Thu, 15 Nov 1973 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=9092