MESSRS. CALCUTTA COMPANY LTD. vs THE COMMISSIONER OF INCOME-TAX,WEST BENGAL

The Supreme Court held that under Section 10(1) of the Indian Income-tax Act, 1922, the appellant's estimated expenditure of Rs. 24,809 for future development was an accrued liability and thus an allowable deduction, despite not being actually incurred in the accounting year. The Court clarified that the liability was unconditional and arose upon execution of the deeds of sale, distinguishing it from contingent liabilities. The previous decisions were referenced, affirming that the difficulty in estimating such liabilities does not negate their accrued status.