Dismissing the appeal of the revenue the Court held that ,the Assessee has accepted and admitted their liability to pay the principal. The deduction towards provision made on account of claim by the principal contractor due to deficiency in contract cannot be disallowed where the documents filed by assessee to prove the claim remained undisputed. (AY. 1997-98)
CIT v Narinderjit Singh (2018) 161 DTR 200 / 300 CTR 217 (Delhi)(HC)
S. 37 (1) : Business expenditure – Provision for deficiency in service – Ascertained liability – Profits chargeable to tax – Remission or cessation -Addition cannot be made. [ S.145 ]