The Assessee is an Association of Persons (‘AOP’) of three entities formed with the specific purpose of participating in the tender floated by Bangalore Metro Rail Corporation Ltd., (BMRCL) for laying metro line along with infrastructure facilities in Bangalore. During the relevant previous year, the Assessee had created provision for expenses which were certain to be incurred and which were estimated scientifically based on a proportion of total project cost. The Assessee had claimed a deduction for such provision of expenses. However, the AO held that the claim for deduction made by the Assessee was only on the basis of an estimate and that incurring of expenditure by the Assessee was purely contingent and therefore the deduction was not allowed. On appeal, the CIT(A) held that on a perusal of the details submitted by the Assessee, the incurring of the expenses in question was a certainty and that the basis on which the liability was estimated was reasonable and therefore the expenditure in question was not a contingent expenditure and had to be allowed as deduction. On appeal by the Department, the Tribunal relying on the decision of the Hon’ble Supreme Court in the case of Calcutta Co Ltd v. CIT (1959) 37 ITR 1 (SC)  and Bharat Earth Motors v. CIT (2000)   245 ITR 428 (SC)  held that in the case of the Assessee, the incurring of liability was certain and the basis of quantification of the same was also scientific and reasonable and hence, it upheld the order of the CIT(A) and allowed deduction for provision for expenses. (AY. 2011-12, 2012-13)