2021 (2) TMI 448

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.... in law, the ld. Commissioner of Income Tax (Appeals) erred in directing the Assessing Officer to examine the records of assessee, whether whole or part of the provision of Rs. 423.59 lakhs written back was disallowed in any of the A.Y. 2010-11 and 2011-12 and if so, to allow the provision to the extent it was disallowed in the assessment order for the relevant previous year? 3. Brief facts of the case are that the Assessing Officer observed that on perusal of the profit and loss account, and audit report of the assessee it is noticed that the assessee has credited an amount of Rs. 423.59 lacs under the head provision for estimated loss on contracts. The assessee vide letter dated 23rd February 2015 has submitted as under:- Loss....

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....be given at this stage. That the appropriate effect on this issue can be given if the matter reaches its finality. 4. Upon the assessee's appeal, the ld. CIT(A) noted the position as under: 4.4.1 The appellant claimed provision for loss for AYs 2009-10, 2010-11 & 2011-12 as under: Assessment Year Provision Remarks 2009-10 Rs. 1,25,39,456/- Allowed by ITAT. 2010-11 Rs. 63,95,102/- Disallowed and confirmed by CIT(A) 2011-12 Rs. 8,06,67,254/- Disallowed and confirmed by CIT(A). 4.4.2 For A.Y. 2012-13, appellant reversed provision of Rs. 423.59 laksh in its books. In the computation the appellant deducted the provision written off on the ground that the provision for the losses were disal....

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....assessment order for relevant previous year. In the result, the ground of appeal no. 1 is partly allowed. 6. Against the above order, the Revenue is in appeal before us. 7. Upon hearing both the counsel and perusing the record, we note that the disallowances in earlier year has not been accepted by the assessee. The assessee is very much contesting the disallowances. So no impact of those disallowances can be considered in this year. The assessee in this year has written back the provisions made in earlier years as the assessee is of the view that they are no longer required. Hence, once the assessee writes back certain provisions as no longer required and takes the same into income, it cannot deduct the same from computation of incom....