https://www.taxtmi.com/caselaws?id=10775 In mercantile accounting, an assessee must reflect an admitted liability or ascertained loss in the year it is booked, even if the claim is not yet legally enforced or remains disputed. The mere absence of recovery proceedings does not justify ignoring the entry, and the accounting recognition of liability for income-tax purposes is distinct from an acknowledgment under the Limitation Act. The deduction is allowable in the year the liability is admitted and entered in the books, while section 41 of the Income-tax Act, 1961 preserves taxation if the liability later ceases. en-us Tue, 02 Aug 2005 00:00:00 +0530 Fri, 24 Jul 2009 19:14:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=10775 In mercantile accounting, an assessee must reflect an admitted liability or ascertained loss in the year it is booked, even if the claim is not yet legally enforced or remains disputed. The mere absence of recovery proceedings does not justify ignoring the entry, and the accounting recognition of liability for income-tax purposes is distinct from an acknowledgment under the Limitation Act. The deduction is allowable in the year the liability is admitted and entered in the books, while section 41 of the Income-tax Act, 1961 preserves taxation if the liability later ceases. Case-Laws Income Tax Tue, 02 Aug 2005 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=10775