https://www.taxtmi.com/caselaws?id=379383 A provision for liquidated damages was not deductible as business expenditure because the liability had not crystallised in the relevant year; the settled test for recognising a provision requires a present obligation, probable outflow, and a reliable estimate, all of which must be satisfied cumulatively. Interest paid to an Indian banker could not be disallowed under Section 40(a)(i) where the factual basis for Section 195 was absent, since the payment was not shown to have been made directly to a non-resident and the banking-company exception under Section 194A(3) also applied. Relief was therefore confined to the TDS issue. en-us Mon, 18 Mar 2019 00:00:00 +0530 Wed, 01 May 2019 10:25:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=379383 A provision for liquidated damages was not deductible as business expenditure because the liability had not crystallised in the relevant year; the settled test for recognising a provision requires a present obligation, probable outflow, and a reliable estimate, all of which must be satisfied cumulatively. Interest paid to an Indian banker could not be disallowed under Section 40(a)(i) where the factual basis for Section 195 was absent, since the payment was not shown to have been made directly to a non-resident and the banking-company exception under Section 194A(3) also applied. Relief was therefore confined to the TDS issue. Case-Laws Income Tax Mon, 18 Mar 2019 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=379383