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2023 (10) TMI 913 - ITAT AHMEDABADProvision of expenses claimed as revenue expenditure - Claim disallowed by AO on the ground that assessee has not provided any evidences which prove that the expenditure debited are actually incurred for the business of the assessee - HELD THAT:- As the assessee has been consistently following this methodology for claiming expenses on a year to year basis and this practice has been accepted by the Department. CIT(A) has allowed the appeal of the assessee on identical set of facts for Assessment Years 2013-14, 2015-16 and 2016-17. Further, in the case of Novartis India Ltd. [2022 (12) TMI 168 - ITAT MUMBAI] ITAT held that disallowance of excess / short year in provisions in current year and allowing in subsequent year is a revenue neutral exercise. ITAT Mumbai held that provisions made on best estimate basis is allowable as deduction as disallowance of excess and short year in provisions in the current year and allowing the same in the subsequent year is a revenue neutral exercise. Further, in the case of CIT vs. Triveni Engineering and Industries Ltd. [2010 (11) TMI 90 - DELHI HIGH COURT] held that when admittedly, the expenditure incurred by the assessee on project was admissible deduction and only dispute was regarding the year of allowability of expenditure, considering that assessee was a company assessed at uniform rate of tax, entire exercise of seeking to disturb the year of allowability of expenditure would, in any case to a tax revenue neutral exercise. In our considered view, the Ld. CIT(A) has not erred in facts and in law in allowing the appeal of the assessee on this issue. Allowability u/s 40(a)(ia) - TDS provisions applicability when the recipient of such sum / income payable by the assessee is not identifiable - HELD THAT:- As in principle we agree with the aforesaid proposition laid down in the assessee’s own case, however, we also observe that the assessee has taken a consistent position that such provision of expenses has been made by the assessee on the basis of actual services availed by the assessee during the year under consideration and such provision is made on a scientific basis. Therefore, it is not possible to accept the proposition that the recipients of income / payees are not identifiable at all by the assessee, since assessee has consistently maintained the position the provision for expenses has been made by the assessee on the basis of services which have been availed by the assessee during the year under consideration. This provision is reversed in the subsequent year, upon receipt of final bill / invoices which has been raised by the service provider and the actual amount is being booked by the assessee as expenses in the subsequent year. Accordingly, it cannot be accepted that the assessee is not aware about the identity of the recipients / payees when provision for expenses have been booked on the basis of services availed by the assessee. matter is being restored to the file of the AO with a direction to verify to ascertain in which specific cases the payees / recipients are not ascertainable and the amount payable to these recipients / payees cannot be determined and thereafter decide the issue in accordance with law, after giving due opportunity to the assessee of being heard. Accordingly, the matter is restored to the file of the Assessing with the aforesaid directions.
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