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TMI Blog2019 (1) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was justified in making estimation of work already done and make a provision in this regard. It is also to be noticed that the said amount of ₹ 4.87 crores has duly been included in the closing stock of the assessee. As such the amount of ₹ 4.87 crores, which had been debited in the profit and loss account, as “provision for project expenses” has duly been credited in the profit and loss account in the closing stock at ₹ 12,47,37,972/- under the caption of building project expenses, which stood increased as a result of inclusion of this amount. That apart the assessee had deducted TDS on the amount/provision made, hence it cannot be said that the liability was a contingent liability. - Decided against revenue - D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res. The assessee came forward with an explanation that the said amount was in relation to work already performed by the contractor qua development of its on going project and the same was duly included in the closing stock of ₹ 37,64,07,367/-, while giving complete details of the closing stock. The Assessing Officer, however, did not agree with the explanation put forth by the assessee and held that the said expenses were in nature of doubtful contingent liability and thus not allowable expenses under the provisions of Income Tax Act, and disallowed the same while passing the assessment order on 31.03.2014. Feeling aggrieved by the said assessment order, the respondent-assessee preferred an appeal which came to be allowed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord reveals that pursuant to the notice given by the Assessing Officer, the assessee had pointed out that the provision had been made in view of the work done by the contractor in its on-going project worth ₹ 12 crore. The assessee stated that though the work had been completed by the contractor, but bills were not raised in wake of some dispute with the contractor for the quality of construction. The liability in respect of work already done had been determined on the basis of contract/prevalent rates and past experience, asserted the assessee. In view of the facts obtaining in the present case, as long as as work done is not in dispute, the respondent-assessee was justified in making estimation of work already done and make a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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