https://www.taxtmi.com/caselaws?id=17236 A provision made only because excise show-cause notices were issued was held not to be deductible, because no demand notice or adjudication had been made during the accounting year and the assessee had not admitted liability. As the proceedings were later dropped, no present liability had accrued and the amount remained a contingent liability. A book entry alone does not convert an uncrystallised liability into allowable expenditure under income-tax law. The deductible claim therefore failed, and the principle stated is that only an existing, accrued liability in praesenti can be allowed as expenditure. en-us Mon, 05 Jan 1998 00:00:00 +0530 Sat, 19 Sep 2009 18:33:53 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=17236 A provision made only because excise show-cause notices were issued was held not to be deductible, because no demand notice or adjudication had been made during the accounting year and the assessee had not admitted liability. As the proceedings were later dropped, no present liability had accrued and the amount remained a contingent liability. A book entry alone does not convert an uncrystallised liability into allowable expenditure under income-tax law. The deductible claim therefore failed, and the principle stated is that only an existing, accrued liability in praesenti can be allowed as expenditure. Case-Laws Income Tax Mon, 05 Jan 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=17236