Provisions for Future Losses Deductible Under Income Tax Law, Supported by Accounting Standard 7 and Prior Decisions.

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....Deductibility of the provision for future losses - in the various decisions discussed above it has been held that applicability of AS-7 is acceptable. In this case it has been argued that as the unbilled revenue has been offered for taxation therefore the provision for future losses, as per AS-7 should be allowed. The AO has not pointed out any defect in the estimate or application of AS-7. - deduction for Future loss is allowable.....