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TMI Blog2024 (8) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... g the assessment proceedings, assessee has not filed any document to prove the basis on which provision was made. The assessee has not filed any document before ITAT also to prove the basis on which the provision was made. The assessee merely filed a list of entities to whom payments were made in subsequent years. However, that does not prove that services were received from those entities during A.Y.2009-10. Assessee had to establish that the expenditure had accrued. Since it was a provision, assessee was required to prove that provision was made on some scientific basis. Assessee failed to prove the same. Thus, for all the reasons discussed above, we agree with the AO that provision of is not allowable expenditure. Disallowance of IT supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited purpose of adjudication of Ground Number 9 of the assessee and directed the registry to fix the case for hearing. Accordingly, the said case was heard for limited purpose of adjudication of Ground Number 9 raised by the assessee. 1.1 The Ground Number 9 is as under : Non consideration of the Hon ble DRP s direction for granting relief in respect of provision for expenses. Erred in not verifying whether the provision for expenses viz IT support of Rs. 48,08,167 and Freight Handling charges of Rs. 16,27,824/-have been made on a scientific basis or on the basis of previous years trends . Findings and Analysis : 2. We have heard both the parties and perused the records. We here onwards discuss both the issues as under . Provision for Fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accrual basis .The invoices received from the parties in the subsequent financial year were duly adjusted against aforesaid provision and tax was duly deducted therefrom 3.2 Considering the reply filed by the assessee, the AO held that it was mere provision, hence disallowed Rs. 16,27,824/-. 3.3 During the hearing before this ITAT the ld.AR reiterated the submission made before the AO. The assessee has merely submitted that the provision of Rs. 16,27,824/- was made on accrual basis. The invoices were received in subsequent financial year. The assessee was asked to file the basis for making provision of Rs. 16,27,824/-. During the assessment proceedings, assessee has not filed any document to prove the basis on which provision was made. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were provided for on an estimated basis and the invoice was received in the subsequent year. Further, tax on the invoice amount was duly deducted and paid on receipt of the invoice. For details please refer page 24 of Appendix A. 4.2 Thus, the admitted fact is assessee had made the provision on estimated basis. Though the AO has mentioned about TDS being deducted in subsequent year, however, it is just an observation to support that the provision was made on estimation basis, without any scientific support. In these facts and circumstances of the case, since the DRP had given the direction to verify whether provision of Rs. 48,08,167/- was made on any scientific basis or not! And we have already observed that no single document has been su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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