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A.P.S. Cold Storage And Ice Factory vs Commissioner Of Income-Tax on 23 July, 1979 cites

E. D. Sassoon And Company Ltd vs The Commissioner Of Income-Tax,Bombay ... on 14 May, 1954

On the record as it stands, it is apparently clear that the award made by the arbitrator has not yet been made a rule of the court, and no decree has been passed against the assessee in respect of the sum awarded. Thus, during the previous year there was no liability in praesenti for the amount in question. In the case of Indian Molasses Co. (P.) Ltd. v. CIT [1959] 37 ITR 66 (SC), their Lordships of the Supreme Court have held that before a liability can be claimed as a deduction, it must be an actual liability in praesenti, and no deduction can be made for a liability de futuro, as it is only contingent.
Supreme Court of India Cites 31 - Cited by 1764 - N H Bhagwati - Full Document

The Commissioner Of Income-Tax, ... vs Swadeshi Cotton And Flour Mills on 17 April, 1964

Similarly, in the case of CIT v. Swadeshi Cotton and Flour Mitts P. Ltd. [1964] 53 ITR 134 (SC), dealing with a case where an award for bonus for earlier years was made in a subsequent year, it was held that deduction for the amount of bonus under the award could be allowed only in the previous year in which the award was given. These cases exemplify the principle that even in a case where mercantile system is followed, the liability, for which the provision is made, must have accrued in the previous year, and should not partake of the nature of a contingent liability. In the present case, although the arbitrators had given their award, it was not enforceable against the assessee, as it had not been made a rule of the court, and no decree had been prepared on its basis. It is settled law that till such time that an award is not made a rule of the court, and a decree obtained on its basis, it cannot be enforced against the party against whom it had been made. Thus, in the previous year all that existed was a mere award against the assessee, and it, at best, created a contingent liability, viz., that the liability would fructify in the event of the same being made a rule of the court. As respects the decision of this court, no decree was passed on the award by the court, and as such no liability in praesenti was created against the assessee.
Supreme Court of India Cites 9 - Cited by 153 - S M Sikri - Full Document
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