https://www.taxtmi.com/caselaws?id=49367 A profit bonus is deductible under section 10(2)(x) read with section 10(5) of the Indian Income-tax Act, 1922 only when the liability is actually incurred or paid according to the accounting method adopted. Under mercantile accounting, the obligation arises when the claim is finally settled by agreement or industrial adjudication, not merely when employees may have a claim during the relevant year. The phrase "for the year in question" in the proviso refers to the year to which the bonus relates, not the year in which deduction is claimed. Reopening earlier accounts was treated as inconsistent with the statutory scheme. en-us Fri, 17 Apr 1964 00:00:00 +0530 Sat, 23 Aug 2014 12:03:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=49367 A profit bonus is deductible under section 10(2)(x) read with section 10(5) of the Indian Income-tax Act, 1922 only when the liability is actually incurred or paid according to the accounting method adopted. Under mercantile accounting, the obligation arises when the claim is finally settled by agreement or industrial adjudication, not merely when employees may have a claim during the relevant year. The phrase "for the year in question" in the proviso refers to the year to which the bonus relates, not the year in which deduction is claimed. Reopening earlier accounts was treated as inconsistent with the statutory scheme. Case-Laws Income Tax Fri, 17 Apr 1964 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=49367