https://www.taxtmi.com/caselaws?id=758235 The ITAT Chennai allowed the assessee's appeal regarding disallowance of provision for contract losses. The AO and CIT(A) incorrectly treated the provision for anticipated contract losses as an unascertained liability not deductible under section 37. The ITAT held that the provision represented ascertained liability/probable loss made on scientific basis, as both revenue and expenses were recognized using percentage of completion method with proper computations. The provision was reversed in subsequent years per estimations. Following precedent from Triveni Engg Industries Ltd, the ITAT distinguished FLSmidth case and allowed the deduction. en-us Tue, 03 Sep 2024 00:00:00 +0530 Tue, 10 Sep 2024 08:11:51 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=758235 The ITAT Chennai allowed the assessee's appeal regarding disallowance of provision for contract losses. The AO and CIT(A) incorrectly treated the provision for anticipated contract losses as an unascertained liability not deductible under section 37. The ITAT held that the provision represented ascertained liability/probable loss made on scientific basis, as both revenue and expenses were recognized using percentage of completion method with proper computations. The provision was reversed in subsequent years per estimations. Following precedent from Triveni Engg Industries Ltd, the ITAT distinguished FLSmidth case and allowed the deduction. Case-Laws Income Tax Tue, 03 Sep 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=758235