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TMI Blog2025 (1) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... hority could not have treated the expenses as contingent liability. Thus, in our view, not only the exercise of jurisdiction u/s. 154 of the Act is invalid, but on merits also the disallowance made is unsustainable. Therefore, we direct the A.O. to delete the disallowance. Grounds are allowed. - Shri Saktijit Dey, VP And Shri Girish Agrawal, AM For the Appellant : Dr. K. Shivaram, Sr. Adv. And Shri Rahul Hakani For the Respondent : Shri R. R. Makwana ORDER PER SAKTIJIT DEY, VP: This is an appeal by the assessee, against order dated 30.09.2024, passed by National Faceless Assessment Centre ( NFAC for short), New Delhi for the assessment year (A.Y.) 2014-15. 2. The grounds raised by the assessee, pertain to the validity of the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the disallowance made, the assessee preferred an appeal before learned first appellate authority. However, learned first appellate authority not only uphold the validity of jurisdiction exercised u/s. 154 of the Act, but also sustained the disallowance. 6. We have heard Dr. K. Shivaram, learned Sr. Counsel appearing for the assessee and Shri R. R. Makwana, learned Departmental Representative. On a perusal of the order passed u/s. 154 of the Act, it is quite evident that the so-called rectification of mistake is for making disallowance of Rs. 2,06,50,000/- claimed as provision for expenses. Interestingly, in the second paragraph of the order passed u/s. 154 of the Act, the A.O. has concluded that allowance of the expenses has resulted in u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid observations, learned first appellate authority has recorded a categorical factual finding that the provision for expenses was made not on estimate basis, but were made on the basis of the actual estimation of liability. Thus, in our view, having recorded a clear factual findings that the provisions were not made on estimate basis, but were made on the basis of actual liability and also the fact that the expenses pertain to the current financial year, the learned first appellate authority could not have treated the expenses as contingent liability. Thus, in our view, not only the exercise of jurisdiction u/s. 154 of the Act is invalid, but on merits also the disallowance made is unsustainable. Therefore, we direct the A.O. to delete t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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