1990 (12) TMI 61

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....as referred the following question under section 256(1) of the Income-tax Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the liability in those cases was not contingent liability but a liability in praesenti and consequently allowing the development expenses of Rs. 14,998 and Rs. 1,04,156 for the assessment years 1972-73 and 197....

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.... out by it. The Income-tax Officer allowed the deduction of the two amounts paid to the Municipal Committee but disallowed the estimated liability on the ground that the assessee had not incurred that expense. The Income-tax Officer was of the opinion that, even under the mercantile system of accounting, the estimated expenditure on a contingent liability could not be made the subject of deductio....