Can unpaid business expenses be claimed as tax deduction? ITAT Mumbai's ruling explains when you can
The Income Tax Appellate Tribunal (ITAT) in Mumbai ruled that a redevelopment firm's ₹8 crore provision for tenant compensation is a deductible expense, rejecting the Income Tax Department's claim that it was contingent. The tribunal determined that the obligation arose from a redevelopment agreement, despite ongoing negotiations and litigation over the exact compensation. This ruling clarifies that unpaid business liabilities can still qualify for tax deductions if they are accrued obligations.