https://www.taxtmi.com/caselaws?id=22893 Under the mercantile system, liability is recognised when it accrues, even if the amount is quantified later. In the discussed decision, service of a requisition order imposing a binding obligation to supply jute bags at a notified price was treated as the point when the sale came into existence for accounting purposes, so the related loss arose then and was allowable on the assessee's claimed basis. The Court also followed the earlier principle that, where the assessee is legally bound to supply below-market goods, the resulting loss may be estimated and later adjusted when actual figures emerge. On that reasoning, the revision under section 263 was not sustained. en-us Mon, 12 Nov 1990 00:00:00 +0530 Tue, 15 Dec 2009 12:04:47 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=22893 Under the mercantile system, liability is recognised when it accrues, even if the amount is quantified later. In the discussed decision, service of a requisition order imposing a binding obligation to supply jute bags at a notified price was treated as the point when the sale came into existence for accounting purposes, so the related loss arose then and was allowable on the assessee's claimed basis. The Court also followed the earlier principle that, where the assessee is legally bound to supply below-market goods, the resulting loss may be estimated and later adjusted when actual figures emerge. On that reasoning, the revision under section 263 was not sustained. Case-Laws Income Tax Mon, 12 Nov 1990 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=22893