disallowance of provisions made by the
assessee treating the same as contingent liability.
3. The assessee in the present case is a company which ... should not be disallowed treating the same as un-ascertained
and contingent liability. As noted by the A.O. in the assessment order, no
explanation
contingent liability and for that he initially relied upon the report of the auditors, who have mentioned that said liability was contingent one. He also ... moment sale is effected and that cannot be treated as contingent liability. He further observed that the SRC No. 448 of 1982 was held
opinion that since the liability was disputed by the appellant before the Supreme Court, the liability was only a contingent liability not allowable in asst ... statutory liability. The Court in this connection observed that where the liability in question is not a statutory liability. The assessee in this case
contended that the
provision for unexpired risks was only a contingent
liability and that a liability under a contract of insurance
where under risk ... capital, maintains that the provision for unexpired risks
is- a contingent liability, and that that
1005
is not within
apart were not designated to meet a liability, contingency or commitment which were known to exist as on the date of the balance-sheet relevant ... profits and other surpluses, not designed to meet a liability, contingency, commitment or diminution in the value of assets known to exist on the date
contingent liability. The liability in our opinion to pay the tax arises as and when the income is earned. The liability may be quantified after ... discharge of the liability. It cannot, therefore, be said that the liability to pay income-tax is a contingent liability depending upon the assessment order
event, an expenditure made to meet a contingent liability.
Mr. S. Iyengar, who appeared on behalf of the assessee, objected to the scope ... relevant accounting year was concerned., was only a contingent liability and therefore not allowable as deductions from the profits of that year, will be left
cannot be treated as a contractual liability. It is a statutory liability and once it is a statutory liability whether it is provided ... result, we answer question No. 1 that royalty liability is a certain liability and not a contingent liability, i.e., in favour of the assessee
satisfactory method of quantifying the liability, even assuming that such a liability could be considered as a quantifiable contingent liability. We are, therefore ... made between an actual liability in praesenti and a liability de futuro, which for the time being is only contingent and the former is deductible
fact, there was no such liability at all. Even if
there was a liability, it was purely a contingent liability which is not
deductible ... concerned, no portion of the liability could be allowed as the liability
was merely of the nature of a contingent liability till
