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2018 (11) TMI 380 - AT - Income TaxAddition of provision for contract loss / expenses - crystallized liability or uncertain liability - no evidence filed by the assessee with regard to provision for rental compensation - Held that:- Just because a claim was filed by the contractor of the assessee, would not mean that assessee was legally bound to pay such amount. The maxim "debitum in praesenti solvendum in futuro" relied on by the ld. Authorised Representative, can apply only if there is an ascertained liability for which amount is to be crystallized and paid later, and not to a situation where there is only a claim, with no acknowledged liability. Commissioner of Income Tax (Appeals) fell in error in taking cognizance of the arbitration proceedings initiated well after the end of the relevant previous year, and coming to a conclusion that there was a crystallized liability of ₹ 70,00,000/- due from the assessee to M/s. Garabandal Constructions Pvt. Ltd as at the end of the relevant previous year. As for the rental compensation of ₹ 55,00,000/- nothing is available on record to show how it was computed or the basis on which assessee claimed itself to be liable to pay such compensation. In these circumstances, we are of the opinion that ld. Commissioner of Income Tax (Appeals) fell in error in allowing the claim of the assessee to the extent of ₹ 1,25,00,000/-. - decided in favour of revenue
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