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2016 (4) TMI 666 - AT - Income TaxDisallowance of claim of "Provision for Expenses" - Held that:- There appears to be no dispute that a liability is imposed upon the assessee to construct certain premises at free of cost and under normal circumstances, it would form part of the project expenditure and is liable to be deducted against the project revenue. However, the peculiar facts brought on record by the tax authorities show that the liability of the assessee is contingent upon handing over of the relevant portion of land to the assessee. Even though the assessee has claimed to have completed the project in the year relevant to the financial year 2010-11, yet the Ld CIT(A) has noticed that the assessee was not given the land till 2013 (even after expiry of more than three years). Further, the assessee also could not show that it did incur any expenditure against the provision so made by it. As pointed out by Ld CIT(A), the question of incurring expenditure would arise only upon handing over of the relevant portion of land to the assessee. These facts support of the case of the revenue that there is no clarify as to whether the assessee is required to discharge the said liability or not. In the absence of clarity on this point, coupled with the fact that the assessee has not been handed over the relevant portion of land, we are of the view that the tax authorities are justified in disallowing the claim of provision for expenses made in the accounts of the assessee - Decided against assessee
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