Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 71 - AT - Income TaxProvision made for future expenses - Allowable revenue expenditure u/s 37(1) - whether contingent in nature and cannot be allowed as a deduction? - HELD THAT:- As we have already noticed the projected future expenses was ₹ 58.62 crores and this comprises of a sum of ₹ 29.69 crores which has to be spent for laying roads after completion of the tunnelling work at various points. The other component of the project of future expenses is the cost of providing design to the entire project. As far as the estimation of expenses for laying of roads after completion of the tunnelling work is concerned, the basis of estimate has been given by the assessee to the Assessing Officer in the letter dated November 14, 2013 filed before the Assessing Officer along with all supporting and technical documents. A perusal of the aforesaid documents show that complete technical details was provided by the assessee. Similarly for design work the workings are at page 216 of the paper book . The amounts received from Bangalore Metro Rail Corporation Ltd. of ₹ 17,91,36,000 has also been noticed in this chart. It has been claimed by the assessee before us that the amount received has been included in the total contract receipts and this may be verified by the AO and to the extent the receipt is not offered as income to treat the same as income because the deduction of expenses on account of provision is to be allowed as per order of the CIT (A), with which we are agreement for the reasons to be given in subsequent paragraphs. The agreement with Mott Macdonald Pvt. Ltd., for providing design work and the related cost. The variation contract with Mott Macdonald Pvt. Ltd is at page 251. The CECI Design Consultant and details of their design work are at page 253. The details of design charges payable to Spar Geo infra Pvt. Ltd., at a page 256. In the light of the complete details filed by the assessee to show that the expenditure in question was not contingent liability at a certain liability, it was not proper on the part of the Assessing Officer to have ignored these documents. Though CIT (Appeals) has not made a reference to these documents but has taken note of the fact that the basis of projected future expenses as claimed by the assessee was reasonable and cannot be regarded as contingent expenditure. In our view both the conditions laid down by BHARAT EARTH MOVERS VERSUS COMMISSIONER OF INCOME-TAX [2000 (8) TMI 4 - SUPREME COURT] have been satisfied in the present case and therefore the expenditure in question should be allowed as a deduction and was rightly allowed as deduction by the CIT(A). We find no grounds to interfere with the orders of the CIT(A) and accordingly appeal of the Revenue is dismissed.
|