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2023 (2) TMI 156 - ITAT PUNEScope of the limited Scrutiny assessment - Allowability of provision for expenditure - assessee who is a builder following the percentage of completion method for the purpose of recognition of income for the purpose of tax - HELD THAT:- When an assessee following the percentage of completion method, it means that the revenue expenses of the contracts are recognized, as the percentage of work completed during the period. The method recognise revenue expenses in proportionate to the completion of the contracted project, which means the question of providing for expenses to be incurred in future does not arise. It is neither the case of the appellant that the corresponding entire income has been offered to tax. The ratio of the decisions of Rotork Controls India (P.) Ltd. [2009 (5) TMI 16 - SUPREME COURT] and Bharat Earth Movers Ltd. [2000 (8) TMI 4 - SUPREME COURT] laid down by the ld. AR have no application to the facts of the present case. CIT(A) had rightly held that when the case was taken up for scrutiny under “Limited Scrutiny” for the purpose of verification of low income, verification of expenses also falls within its sweep. Thus, we are of the considered opinion that the provision for expenses as claimed by the assessee was rightly disallowed by the Assessing Officer. Accordingly, the order of the ld. CIT(A) is based on proper appreciation of facts of the case and just and proper and does not warrant any inference by this Tribunal. Appeal filed by the assessee stands dismissed.
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