https://www.taxtmi.com/caselaws?id=36192 Under the mercantile system, royalty is deductible only when an enforceable legal obligation to pay has arisen. The earlier enhancement of royalty did not by itself create a recoverable liability in West Bengal because the State's right to enforce royalty had been negatived until the West Bengal Estates Acquisition (Amendment) Act, 1964 retrospectively inserted section 5(2) and revived that right. The liability therefore did not accrue in the earlier year when coal was raised, but only when the amended provision took effect. On that basis, the royalty remained an admissible business expenditure for assessment year 1965-66. en-us Wed, 24 Sep 1980 00:00:00 +0530 Sat, 20 Mar 2010 10:20:44 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=36192 Under the mercantile system, royalty is deductible only when an enforceable legal obligation to pay has arisen. The earlier enhancement of royalty did not by itself create a recoverable liability in West Bengal because the State's right to enforce royalty had been negatived until the West Bengal Estates Acquisition (Amendment) Act, 1964 retrospectively inserted section 5(2) and revived that right. The liability therefore did not accrue in the earlier year when coal was raised, but only when the amended provision took effect. On that basis, the royalty remained an admissible business expenditure for assessment year 1965-66. Case-Laws Income Tax Wed, 24 Sep 1980 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=36192