Admissibility of Business Expenditure ::

Court :
HC

Brief :
Held by hon"ble court that under mercantile system of accounting assessee is entitled to deduction of loss/ expenditure in the year in which such entry is made in books of account. Hence, A.O. is not justified in disallowing deduction for amount payable under terms of contract on ground that such sum was not paid actually.

Citation :
Jiwanram Sheoduttrai Vs. C.I.T

Admissibility of Business Expenditure Jiwanram Sheoduttrai Vs. C.I.T 8/2/2005 (2005) 279 ITR 512 (Cal) Case Fact: Whether A.O. was justified in disallowing deduction for amount payable under terms of contract on grounds that such sum has not been paid actually. Decision: Held by hon"ble court that under mercantile system of accounting assessee is entitled to deduction of loss/ expenditure in the year in which such entry is made in books of account. Hence, A.O. is not justified in disallowing deduction for amount payable under terms of contract on ground that such sum was not paid actually.

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Judgement posted by

CA.Saibaburao Nanduri

Chartered Accountant

I am a commerce graduarte of Andhra University. Studied at HINDU COLLEGE, Guntur. Became FCA and started Practice under the name and style of M/s SAIBABU RAO CO I became Chairman of CA Institute, Guntur Branch, during the year 2008-09 My post qualifications are: Information Systems Audit DISA (ICAI) ... Read more

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