Write-back deduction cannot depend on pending earlier-year disputes where it would create a double benefit.

The write-back of provision for estimated loss on contracts, having been credited in the books and offered to tax in the year under appeal, could not be deducted again merely because earlier-year disallowances were under challenge. Allowing the deduction on the basis of possible future relief in other years would give the assessee a double benefit and make the assessment depend on speculative outcomes in pending proceedings. The Tribunal held that it must confine itself to the assessment year before it and cannot grant relief contingent on matters arising in other years. The first appellate authority's direction was therefore not sustainable, and the deduction was disallowed in the current year.

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Issues: Whether the write-back of provision for estimated loss on contracts could again be deducted in the current assessment year merely because the earlier year disallowances were under challenge.

Analysis: The provision had been written back in the books and offered to tax for the year under consideration. The assessee was still contesting the disallowances made in the earlier years, and one year's disallowance had even succeeded before the Tribunal. In these circumstances, allowing a deduction in the current year on the basis of possible future relief in earlier years would amount to giving the assessee a double benefit and would make the decision dependent on speculative outcomes of other proceedings. The Tribunal held that it must confine itself to the assessment year in appeal and cannot issue directions based on contingencies in pending matters for other years.

Conclusion: The direction of the first appellate authority was not sustainable, and the deduction claimed on the write-back was not allowable in the current year.

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