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2019 (1) TMI 1343 - RAJASTHAN HIGH COURTDisallowance of provision made for project expenses - contingent liability - assessee had pointed out that the provision had been made in view of the work done by the contractor in its on-going project and work had been completed by the contractor, but bills were not raised in wake of some dispute with the contractor for the quality of construction - Held that:- The liability in respect of work already done had been determined on the basis of contract/prevalent rates and past experience, asserted the assessee. In view of the facts obtaining in the present case, as long as as work done is not in dispute, the assessee was justified in making estimation of work already done and make a provision in this regard. It is also to be noticed that the said amount of ₹ 4.87 crores has duly been included in the closing stock of the assessee. As such the amount of ₹ 4.87 crores, which had been debited in the profit and loss account, as “provision for project expenses” has duly been credited in the profit and loss account in the closing stock at ₹ 12,47,37,972/- under the caption of building project expenses, which stood increased as a result of inclusion of this amount. That apart the assessee had deducted TDS on the amount/provision made, hence it cannot be said that the liability was a contingent liability. - Decided against revenue
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