THE INDIAN MOLASSES CO. (PRIVATE) LTD. vs THE COMMISSIONER OF INCOME-TAX, WESTBENGAL.

The Supreme Court held that under Section 10(2)(XV) of the Indian Income-tax Act, 1922, expenditure must relate to a liability that is actually existing at the time of the claim. The Court ruled that the payments made by the appellant company for annuities to provide a pension were not deductible as they did not constitute actual expenditure but rather a contingent liability. Thus, the Income-tax authorities' disallowance of the deduction was upheld, affirming that the expenditure was not incurred in the course of business operations.