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1971 (5) TMI 22 - HC - Income TaxOrdinarily, an assessee maintaining his accounts on the mercantile system is entitled to deduction only if the appropriate debit entry has been made in the account. But that, it seems to us, is not an absolute rule. The liability arose by virtue of section 144 of the Code, and we do not see why it should be taken as not having accrued merely because of the omission of the assessee to enter the liability in its account books. The liability arose because of the operation of law. It could not be denied merely because it was not entered in the accounts. Its existence did not depend upon entries being made in the assessee's books. The omission of the assessee to make the entries in its books merely rendered the accounts inaccurate. We are in agreement with the Appellate Tribunal that the absence of entries in the account books cannot deprive the assessee of his right to the deduction.
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