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2016 (9) TMI 1295 - AT - Income TaxDisallowance of gift, boni & chandla expenses - Held that:- The Revenue fails to place on record any material before us rebutting CIT(A)’s findings as above that the assessee has already filed all necessary details and evidences along with proof of payment. There can hardly be any doubt that this assessee is carrying out his multiple construction projects wherein such expenses are undertaken on auspicious occasion of commencement of construction activity etc. We find no reason to interfere with CIT(A)’s finding under challenge. This first substantive ground is declined against revenue. Disallowance of defect liability provision - Held that:- It is very much admitted that the assessee company has to keep a portion of its contractual money with its clients for sufficiently long period ranging between 12 to 18 months in the form of cash retention or bank guarantee. The same is released only after this defect clause period is over without involving any corresponding repair work. We notice that even the Assessing Officer is fair enough in not disputing this factual position. He rejects assessee’s claim on two counts. The first one is that the assessee has not made provision for any ascertained liability. We find from page nos.35 to 37 of the paper book along with the corresponding agreement that the assessee’s computation of provision of defect liability is computed as per the specific logic therein. Cash retention by its clients is between 5 to 10%. The assessee has made the impugned provision @ 1% by following the above stated computation. Learned departmental representative fails to dispute correctness thereof in the course of hearing. We are of the opinion in these facts and circumstances that the assessee has satisfied both the Assessing Officer’s objections so as to support the lower appellate findings under challenge. The CIT(A) has already set out the corresponding figure forming the basis of estimation. The Revenue’s last argument that preceding assessment years involved different liabilities is also devoid of merits since it is only a difference of nomenclature vis-a-vis the naming of the liability head in the impugned assessment year. - Decided against revenue
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