https://www.taxtmi.com/caselaws?id=470036 Warranty obligations linked to sales constitute accrued liabilities under the mercantile system when they can be reasonably estimated. A provision supported by historical experience, systematic accounting records and scientific actuarial valuation remains deductible even though actual claims arise and are settled later; an actuarially identified shortfall in an earlier provision may therefore be recognised. Royalty subject to tax deduction at source is deductible in the statutory year connected with payment or tax deduction, rather than solely in the year when timely tax deposit occurs. Accordingly, royalty accruing and subject to tax deduction in an earlier assessment year must be claimed in that year, not in the subsequent year of deposit. en-us Mon, 24 Jan 2011 00:00:00 +0530 Tue, 14 Jul 2026 14:10:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=470036 Warranty obligations linked to sales constitute accrued liabilities under the mercantile system when they can be reasonably estimated. A provision supported by historical experience, systematic accounting records and scientific actuarial valuation remains deductible even though actual claims arise and are settled later; an actuarially identified shortfall in an earlier provision may therefore be recognised. Royalty subject to tax deduction at source is deductible in the statutory year connected with payment or tax deduction, rather than solely in the year when timely tax deposit occurs. Accordingly, royalty accruing and subject to tax deduction in an earlier assessment year must be claimed in that year, not in the subsequent year of deposit. Case-Laws Income Tax Mon, 24 Jan 2011 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=470036