https://www.taxtmi.com/caselaws?id=15202 Under the mercantile system, a deduction can be claimed only when the liability has actually accrued and is reasonably certain. Where the existence or quantification of liability remains uncertain, no earlier provision can be compelled. Here, the assessee's liability to pay interest arose only when the Government later directed that the outstanding amount be treated as a loan carrying interest; until then, the assessee had sought adjustment against shares and no enforceable interest claim existed. The interest paid pursuant to that later demand was therefore a proper business expenditure of the relevant year and deductible as revenue expenditure. en-us Thu, 02 Apr 1998 00:00:00 +0530 Mon, 03 Aug 2009 16:38:42 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=15202 Under the mercantile system, a deduction can be claimed only when the liability has actually accrued and is reasonably certain. Where the existence or quantification of liability remains uncertain, no earlier provision can be compelled. Here, the assessee's liability to pay interest arose only when the Government later directed that the outstanding amount be treated as a loan carrying interest; until then, the assessee had sought adjustment against shares and no enforceable interest claim existed. The interest paid pursuant to that later demand was therefore a proper business expenditure of the relevant year and deductible as revenue expenditure. Case-Laws Income Tax Thu, 02 Apr 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=15202