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Section 37(1), read with section 145, of the Income-tax Act, 1961 - Business expenditure - Year in which deductible - Assessment year 2000-01 - Assessee had entered into an agreement with a foreign company under which latter provided manpower to assessee for executing its software projects - In consideration, assessee had to reimburse employment cost of personnel provided by foreign company - For that purpose, assessee made provision of certain amount in relevant assessment year under head 'expatriate cost' on basis of invoices raised by foreign company - Assessing Officer disallowed assessee's claim of deduction in respect of amount of provision, on ground that requisite approval of RBI for agreement and remittances had been received in subsequent year - On appeal, Commissioner (Appeals) as well as Tribunal allowed assessee's claim holding that since it had been following mercantile system of accounting, liability had accrued in relevant assessment year, even though same was to be discharged at a later date - Whether on facts, Tribunal had taken correct view - Held, yes CASE REVIEW Nonsuch Tea Estate Ltd. v. CIT [1975] 98 ITR 189 (SC) distinguished [Para 9] Bhai Sunder Dass & Sons Co. (P.) Ltd. v. CIT [2003] 259 ITR 33 /[2002] 124 Taxman 685 (Delhi) followed[Para 9]. CASES REFERRED TO CIT v. Eicher Ltd. [2006] 287 ITR 170 /[2007] 159 Taxman 293 (Delhi) [Para 3], CIT v. HCL Comnet Systems & Services Ltd. [2007] 292 ITR 299 (Delhi) [Para 3], CIT v. HCL Comnet Systems & Services Ltd. [2008] 305 ITR 409 / 174 Taxman 118 (SC) [Para 3], Bhai Sunder Dass & Sons Co. (P.) Ltd. v. CIT [2003] 259 ITR 33/[2002] 124 Taxman 685 (Delhi) [Para 4], Nonsuch Tea Estate Ltd. v. CIT [1975] 98 ITR 189 (SC) [Para 4] and CIT v. A. Gajapathy Naidu [1964] 53 ITR 114 (SC) [Para 8]. Ms. Prem Lata Bansal for the Appellant. Aseem Mowar, Ms. Mallika Poswal and Ms. Sheena Piplani for the Respondent. JUDGMENT Badar Durrez Ahmed, J. - This appeal under section 260A of the Income-tax Act, 1961 (hereinafter referred to as the "said Act") is directed against the Tribunal's order dated 10-3-2004 pertaining to the assessment year 2000-01. 2. The learned counsel for the…

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