Deduction can be claimed in respect of a crystallized liability:

AO invoked S.43B and disallowed assessee’s claim in respect of “Water connection charges” paid to Surat Municipal Corporation” on the ground that liability to pay the same had not crystallised during the year under consideration. Both the lower appellate authorities allowed assessee’s claim after recording factual findings that assessee had actually incurred the said expenditure. Liability in respect of the same had been crystallized during the relevant year and hence, the same cannot be termed as a contingent liability. Neither the contractee had reimbursed the assessee nor had the contractee claimed such amount by way of expenditure. The said view was upheld by the Hon’ble High Court also.

[BHAGWATI CORPORATION - TAX APPEAL NO.932 of 2011 - GHC]