https://www.taxtmi.com/caselaws?id=361687 Under the mercantile system, a deduction is allowed only when the liability has crystallised under the governing contract or statute. A provision for increased wages was not deductible in the earlier previous year because the award creating the liability was made later, and retrospective wording did not itself create accrual; the claim failed. Commission payable to Sri Lankan agents and to Annapurna Agencies accrued when orders were procured, since the contracts made commission earned on securing orders and only deferred payment; these claims succeeded. Insurance premium for the Sri Lanka project had not accrued because cover was conditional on payment of premium; this claim failed. Liquidated damages accrued on delivery under the agreement, so that issue also succeeded. en-us Tue, 01 May 2018 00:00:00 +0530 Thu, 20 Dec 2018 16:14:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=361687 Under the mercantile system, a deduction is allowed only when the liability has crystallised under the governing contract or statute. A provision for increased wages was not deductible in the earlier previous year because the award creating the liability was made later, and retrospective wording did not itself create accrual; the claim failed. Commission payable to Sri Lankan agents and to Annapurna Agencies accrued when orders were procured, since the contracts made commission earned on securing orders and only deferred payment; these claims succeeded. Insurance premium for the Sri Lanka project had not accrued because cover was conditional on payment of premium; this claim failed. Liquidated damages accrued on delivery under the agreement, so that issue also succeeded. Case-Laws Income Tax Tue, 01 May 2018 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=361687