https://www.taxtmi.com/caselaws?id=38563 Business liabilities under mercantile accounting are deductible only when they become fixed and enforceable. Remuneration payable under the contract remained contingent because it depended on a further arrangement that never materialised and was bona fide disputed; the arbitration award crystallised the principal liability in the relevant accounting year. Interest was also deductible only in that year because neither the contract nor statute created an earlier entitlement, and the obligation arose solely from the award. An earlier book adjustment did not determine the liability's legal character for income-tax purposes. The deduction was therefore allowable in the year of the arbitration award. en-us Thu, 06 May 1976 00:00:00 +0530 Wed, 07 Apr 2010 12:32:48 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=38563 Business liabilities under mercantile accounting are deductible only when they become fixed and enforceable. Remuneration payable under the contract remained contingent because it depended on a further arrangement that never materialised and was bona fide disputed; the arbitration award crystallised the principal liability in the relevant accounting year. Interest was also deductible only in that year because neither the contract nor statute created an earlier entitlement, and the obligation arose solely from the award. An earlier book adjustment did not determine the liability's legal character for income-tax purposes. The deduction was therefore allowable in the year of the arbitration award. Case-Laws Income Tax Thu, 06 May 1976 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=38563