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In the case of Hukumchand Jute & Industries Ltd. v. CIT (107TAX596) the assessee followed the mercantile basis of keeping accounts.In the absence of bill for consumption of power the assessee made a claim for deduction of adhoc provision in accounts. The Calcutta High Court held that the liability accrued in the year in which the electricity units were consumed by the assessee and only quantification was yet to be made. As such the Court therefore reversed the decision of the Tribunal that the liability accrued only after the assessee received the bill.


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