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2018 (12) TMI 1597 - HC - Income TaxProvision created for payment of compensation to Garbandal Constructions - contract loss - Whether an unascertained liability not allowable as business expenditure? - Held that:- The details furnished by the assessee company were referred to and the break-up details were also culled out in the order passed by the CIT(A). It is not clear as to whether those materials were available with the AO, which, according to the assessee, were very much available and were furnished along with the letter dated 13.3.2015. A remand report could have been called for by the CIT(A) from the AO to examine the correctness of the break-up details furnished since, in the letter dated 13.3.2015, there are no clear figures given except to state that the provision was made in the relevant assessment year on account of the arbitration petition filed by the contractor. We find that in the said letter, there is also a mention about the amounts, which were written back and offered as income in the subsequent assessment years namely assessment year 2013-14 and 2014-15. There are other details, which appeared to have been enclosed along with the said letter dated 13.3.2015, but they have not been referred to by the Assessing Officer in the assessment order dated 23.3.2015. Therefore, a fresh exercise needs to be done by the AO by perusing all the documents produced by the assessee and the Assessing Officer should ascertain as to whether the provision made during the relevant assessment year was an ascertained liability or a contingent liability. The appeal filed by the assessee is allowed, the impugned order passed by the Tribunal is set aside and the matter is remanded to the Assessing Officer to verify all the records and decide the question as mentioned above. The substantial questions of law left open.
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