Firm Denied Tax Deduction for Compensation Due to Lack of Property Ownership and Established Liability in Relevant Year.

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....The High Court held that the assessee firm was not entitled to claim deduction u/s 37(1) of the Income Tax Act for the compensation paid. The key points are: The properties involved in the agreement did not belong to the assessee firm during the relevant assessment year. The assessee did not have any right, title or interest in those properties. The assessee was not a party to the agreements related to those properties. The Tribunal's reasoning that the assessee had acquired interest or rights in the properties by virtue of registration or identification was erroneous. The assessee failed to substantiate that the liability for compensation was crystallized or provided for during the relevant year. The Tribunal erred in allowing the assessee's claim by setting aside the concurrent findings of the lower authorities.....