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2023 (8) TMI 1192 - KARNATAKA HIGH COURTDisallowance of future expenses claimed as deduction - unbillable expenses include reconstruction of roads damaged while constructing tunnels and during the other construction activities undertaken by the Assessee - Assessee made provision for expenses - AO disallowed the said provisions - CIT(A) allowed the same on the ground that the provision was not contingent one, but based on the matching expenditure on ascertained liability, also upheld by ITAT - HELD THAT:- There is no grievance by the Revenue so far as the design aspect is concerned. With regard to the provision for expenses towards construction of roads and other civil works, the contention urged on behalf of the Revenue is that AO has not correctly examined the factual matrix. As right in his submission that AO in his order has extracted a copy of the communication between the Assessee and the department, which shows that the Assessee had enclosed technical documents, costs and computation for arriving at a provision for the respective years. This has been noted by the ITAT the impugned order. In addition, ITAT has recorded that AO has noted the details of expenditure in his order and the same has been extracted in ITAT’s order also. As urged on behalf of the Revenue that for AY 2013-14 the matter was remanded to the AO. There is no parity insofar as an order of remand is concerned. It is based on the facts of each case. As even for the said AY 2013-14, after remand, AO has accepted the provision made by the Assessee. For the subsequent years, namely AY 2014-15 no disallowance has been made. There is no dispute with regard to the fact that the provision for expenses is made on pro rata basis based on the turnover with reference to total unbillable future expenses of the project. Decided in favour of assessee.
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