https://www.taxtmi.com/caselaws?id=49587 Under the mercantile system of accounting, an unconditional covenant in conveyance deeds to complete roads, drains, filling and lighting creates an accrued legal liability at the date of sale rather than a mere contingent liability; consequently the estimated cost to discharge that liability may be debited before payment and treated as an allowable deduction in computing profits and gains under income tax law, while tax authorities retain the power to examine and fix an appropriate monetary estimate. 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 Under the mercantile system of accounting, an unconditional covenant in conveyance deeds to complete roads, drains, filling and lighting creates an accrued legal liability at the date of sale rather than a mere contingent liability; consequently the estimated cost to discharge that liability may be debited before payment and treated as an allowable deduction in computing profits and gains under income tax law, while tax authorities retain the power to examine and fix an appropriate monetary estimate. Case-Laws Income Tax Tue, 12 May 1959 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=49587