The assessee failed to substantiate the provision made for...

The assessee failed to substantiate the provision made for freight, material handling charges, and IT support expenses as an allowable expenditure. The assessee merely stated that provisions were made on an accrual basis without providing any evidence or documents to demonstrate that they were calculated scientifically or based on previous years' trends. Despite being asked to furnish the basis for making provisions during assessment proceedings and before the ITAT, the assessee did not submit any documents. The assessee only provided a list of entities to whom payments were made in subsequent years, which did not establish that services were received from them during the relevant assessment year. As per the Income Tax Act and Supreme Court ruling, provisions are not allowable expenses unless proven to be made on a scientific basis. Since the assessee admitted the provisions were estimated and failed to substantiate the scientific basis, the disallowance of provisions as allowable expenditure was upheld.