Section 51: Claim of right.

(1) Where a cash-basis taxpayer includes in assessable income an amount which the taxpayer is not entitled to receive or claims a deduction for an amount which the taxpayer is not obliged to pay, the calculation of chargeable income shall be adjusted for the year of assessment in which the taxpayer refunds the amount received or receives back the amount paid. (2) An accrual-basis taxpayer shall include an amount in assessable income or claim a deduction even if not legally entitled to receive the amount or liable to pay the expense if the taxpayer claims to be legally entitled to receive the amount or to be legally obliged to pay the expense. (3) Where an accrual-basis taxpayer includes an amount in income or claims a deduction under subsection (2), the calculation of chargeable income shall be adjusted for the year of assessment in which the taxpayer ceases to claim the right to receive the amount or ceases to claim an obligation to pay the amount.