9911796707
TMI Blog2019 (1) TMI 1527X X X X Extracts X X X X X X X X Extracts X X X X ..... in the business of undertaking promotional, mailing and marketing, publicity activities on behalf of the major insurance companies. For the Asstt. Year 2012-13, they have filed their return on 29.9.2012 declaring an income of Rs. 16,51,520/-. Learned AO, however, made certain additions including Rs. 3,83,57,753/- by disallowing the provision debited to the Profit and Loss Account. 3. In the appeal, learned CIT(A) while confirming certain additions, however, deleted the addition made by the learned AO to the tune of Rs. 3,83,57,753/- on the ground that this provision is unascertained expenditure but it was the liability that was existing at the end of the financial year but the payments made subsequent to the end of the financial year but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the end of the financial year but discharged subsequently before the finalization of the accounts and this course has been followed by the assessee for quite a long time and even in the scrutiny u/s 143(3), such a disallowance was not made. He substantiated his submissions by placing on record the assessment order for the Asstt. Year 2011-12, which was also referred by the ld. CIT in his order. Lastly, learned AR submitted that this is a revenue neutral transaction because if such an expense is not allowed in the current assessment year, it has to be allowed in the next year inasmuch as there is no doubt expressed by the learned AO as the genuineness or incurring of such expenditure. 7. We have gone through the record in the light of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharged at a future date and makes no difference if the future date on which the liability shall have to be discharged is not certain. The provision made by the assessee for meeting the liability incurred by it before the date of closure of accounts is an allowable deduction out of gross receipts of the accounting year during which the provision for meeting such expenditure was made and such a liability is not a contingent liability. We, are, therefore, convinced that the case on hand is fully covered by the ratio laid down in the case of Bharat Earth Movers (supra) by the Hon'ble Apex count and by no stretch of imagination, could it be said that the matter involves contingent and conditional liability but on the other hand, it is the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
