TMI Blog2008 (4) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... .14-7-2004 for assessment year 2001-02. First ground in the appeal is against the disallowance of ₹ 90 lakhs being provision for salaries. 2. The assessee manufactures and trades in chemicals. It returned a loss of ₹ 20,25,73,469 for the year under consideration. In the course of assessment proceedings, from the notes on accounts it was noticed that the wage agreement between the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... workers and also showed us sample vouchers evidencing the payment. The contention of the learned Departmental Representative was that no details were given as to how the estimate was made and moreover, it being a contingent liability, the disallowance was justified. 4. We have duly considered the rival contentions and the material on record. The undisputed facts are that the earlier wage agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quantification of the liability. Therefore, the assessee was justified in making the provision on estimated basis and hence we delete the disallowance. 5. Next ground in the appeal is against the disallowance of ₹ 75,000/- being entrance fees to clubs for the officers of the assessee company. The Assessing officer made the disallowance by observing that the assessee could not clarify whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with various persons for promoting company's business interests. Several judgment (s) were relied upon by the Delhi Bench, notable amongst them being Otis Elevator Co. (India) Ltd. in 195 ITR 682, CIT v. Sundaram Industries Ltd. in 240 ITR 335 and several others. Thus, respectfully following the aforesaid decisions, we direct the Assessing Officer to delete the disallowance of ₹ 75,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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