weather amount paid for sttlement of dispute is allowable

This query is : Resolved

mohammed arshad ali (Querist)
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22 December 2009 our company is having a debt of around 6 lakhs to nsic uder a dispute.
now the company has settled the dispute for 20 lakhs
please advise weather the extra payment made is an allowable expence as per incoem tax act.

M Prabhakar Menon

M Prabhakar Menon (Expert)
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23 December 2009 If the dispute is spread over more than one accounting year then was this fact mentioned / refered to in the auditor's report? In which case it would be easier to deal with in I Tax Assuming it is not so the relevant court order and related papers should suffice Your auditor would have to mention this in his report for that year.