https://www.taxtmi.com/caselaws?id=49587 An unconditional contractual undertaking to carry out development work, such as roads, drains and lighting, created an accrued liability under the mercantile system even though performance and exact quantification were deferred. The estimated cost was deductible in the accounting year because the obligation had already arisen and its valuation difficulty did not make it contingent. The same expenditure was also allowable in computing business profits, since taxable profits are to reflect the true commercial balance after giving effect to obligations incurred to earn the sale receipts. The principle is that an accrued business liability need not be paid or precisely quantified before deduction if it has definitely arisen. en-us Tue, 12 May 1959 00:00:00 +0530 Tue, 21 Apr 2026 10:37:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=49587 An unconditional contractual undertaking to carry out development work, such as roads, drains and lighting, created an accrued liability under the mercantile system even though performance and exact quantification were deferred. The estimated cost was deductible in the accounting year because the obligation had already arisen and its valuation difficulty did not make it contingent. The same expenditure was also allowable in computing business profits, since taxable profits are to reflect the true commercial balance after giving effect to obligations incurred to earn the sale receipts. The principle is that an accrued business liability need not be paid or precisely quantified before deduction if it has definitely arisen. Case-Laws Income Tax Tue, 12 May 1959 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=49587