https://www.taxtmi.com/caselaws?id=15497 Under the mercantile system, a statutory bonus liability under the Payment of Bonus Act accrues in the accounting year even if the exact amount is quantified after year-end, so the excess later determined remained deductible in that year because it did not exceed the statutory ceiling. Expenditure on food and drinks supplied to customers was treated as hospitality, not entertainment, and was therefore outside the disallowance under section 37(2A) of the Income-tax Act, particularly since the amended provision applied only from 1 April 1976. Both issues were resolved in favour of the assessee. en-us Tue, 28 Jul 1998 00:00:00 +0530 Tue, 25 Aug 2009 15:36:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=15497 Under the mercantile system, a statutory bonus liability under the Payment of Bonus Act accrues in the accounting year even if the exact amount is quantified after year-end, so the excess later determined remained deductible in that year because it did not exceed the statutory ceiling. Expenditure on food and drinks supplied to customers was treated as hospitality, not entertainment, and was therefore outside the disallowance under section 37(2A) of the Income-tax Act, particularly since the amended provision applied only from 1 April 1976. Both issues were resolved in favour of the assessee. Case-Laws Income Tax Tue, 28 Jul 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=15497