https://www.taxtmi.com/caselaws?id=15961 Royalty payable under a collaboration agreement subject to prior Government approval did not accrue as an enforceable liability in the accounting year before approval was granted. Although the assessee maintained mercantile accounts, execution of the agreement alone did not create a deductible obligation because the agreement expressly became effective only on Government approval. The liability arose only in the next accounting year when approval was obtained, and the approval could not relate back to fasten liability earlier. The royalty was therefore not allowable as a deduction for the relevant year. en-us Wed, 31 Mar 1999 00:00:00 +0530 Mon, 31 Aug 2009 12:24:45 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=15961 Royalty payable under a collaboration agreement subject to prior Government approval did not accrue as an enforceable liability in the accounting year before approval was granted. Although the assessee maintained mercantile accounts, execution of the agreement alone did not create a deductible obligation because the agreement expressly became effective only on Government approval. The liability arose only in the next accounting year when approval was obtained, and the approval could not relate back to fasten liability earlier. The royalty was therefore not allowable as a deduction for the relevant year. Case-Laws Income Tax Wed, 31 Mar 1999 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=15961