https://www.taxtmi.com/caselaws?id=36720 Under the mercantile system, a tax deduction is allowable only when a legal liability has accrued in the relevant year. The assessee had collected purchase tax, but on the facts no enforceable liability to purchase tax on arhar dal had arisen in that previous year under section 3D of the U.P. Sales Tax Act, and a later assessment order could not create retrospective liability. As no statutory liability had accrued when the books entries were made, the amount was not deductible and was rightly added to taxable income. en-us Fri, 28 Mar 1980 00:00:00 +0530 Wed, 24 Mar 2010 11:25:09 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=36720 Under the mercantile system, a tax deduction is allowable only when a legal liability has accrued in the relevant year. The assessee had collected purchase tax, but on the facts no enforceable liability to purchase tax on arhar dal had arisen in that previous year under section 3D of the U.P. Sales Tax Act, and a later assessment order could not create retrospective liability. As no statutory liability had accrued when the books entries were made, the amount was not deductible and was rightly added to taxable income. Case-Laws Income Tax Fri, 28 Mar 1980 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=36720