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2023 (8) TMI 591 - HC - Income TaxAllowability of provision made for liquidated damages represented an ascertained liability - HELD THAT:- Tribunal has made no reference to either the clause relating to liquidated damages or the agreement which was operable between the assessee and BSNL, nor did it clearly formulate as to whether represented the ascertained liability under the head “Provision for Liquidated Damages”. To our minds, the flaw in the Tribunal’s formulation is found in the following part of which reads as follows impugned amount was not only the provision but the actual amount of the liquidated damages pertaining to the period of delay falling within the previous year relating to the assessment year under consideration. It is no one’s case, leave alone that of the assessee, that Rs. 17,61,99,672/- represented the actual amount of liquidated damages. It is the respondent/assessee’s case that Rs. 17,61,99,672/- represents an ascertained liability, which could change if there are any waivers or remissions. The issue which the Tribunal had to grapple with, and clearly return a finding, one way or the other, was whether the said amount in the given facts and circumstances of the case, represented an ascertained liability. Given this position, both counsels agree that the matter can be remanded to the Tribunal, with a direction to dispose of the matter based on the documents already on record. The impugned order is set aside - Tribunal will reexamine the issue based on the material already on record and return a finding, one way or the other, as to whether such amount represented an ascertained liability.
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