The HC ruled in favor of the assessee regarding Asset...

The HC ruled in favor of the assessee regarding Asset Reconstruction Cost (ARC) provisioning, holding it qualified as a present obligation under AS 29 rather than a contingent liability. The Court determined the contractual obligation to repair and restore premises constituted an ascertainable liability that was properly provisioned for. The HC rejected the tax authorities' view that only ascertained liabilities could be provisioned. Regarding interest deduction under Section 36(1)(iii), the Court clarified that the provision's proviso merely disallows interest during the period between borrowing and when an asset is put to use for business extension. The matter was remanded to the AO to examine whether cell sites were actually put to use and whether funds came from a common pool.