2020 (10) TMI 1082

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....T (Appeals), in so far as it is prejudicial to the interest of revenue, is opposed to law and the facts and circumstances of the case. 2. The Ld. CIT (A) erred in deleting the Disallowance of Rs. 7,85,14,570/- made by AO towards the provisions for future expenses claimed. 3. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the Ld. CIT (A) be reversed and that of the Assessing Officer be restored. 4. The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of appeal." Brief facts of the case are as under: 2. Assessee is an Association of persons carrying on business of civil const....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s on 31/03/2013. It was also submitted that, similar provision was made for expenditure in previous asst. years, being 2011-12 and 2012-13. Ld. AO perused submissions filed by assessee and called upon assessee once again to explain the reason for unbelievable amount claimed as expenditure in profit and loss account. 5. Upon receipt of details filed by assessee, Ld.AO was of the opinion that, such type of contingent liabilities were not deductible as held by Hon'ble Supreme Court in case of Indian Molasses Company Ltd vs CIT, reported in (1959) 37 ITR 66. He also placed reliance on decision of Hon'ble Karnataka High Court in case of CIT vs Microland Ltd reported in (2012) 347 ITR 613. Ld.AO thus was of opinion that, provision in questi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... He submitted that, for year under consideration assessee has not established/demonstrated nature of payments, for which estimation has been made under the provision for future claims. He thus submitted that, issue may be remanded back for verification in light of Agreement entered into by assessee with BMR CL. 11. On the contrary, Ld.AR submitted that, sum of Rs. 33,72,01,011/- has been provided towards outstanding expenses which fell due and was discharged during the year. The 2nd proviso was made towards future expenses amounting to Rs. 7,85,14,570/-. Ld.AR submitted that, this is a case where, assessee has to incur certain expenditure without any further billing, as he submitted that these expenses are built into overall cost o....