Assessee was awarded a project for supply of super critical turbines for thermal power project. Contract value consisted of offshore supply and onshore supply.  Contract revenue for onshore supply portion was determined at certain sum. However, within some months, cost had been claimed to have escalated and a loss was visualized. Assessee made provision for foreseeable loss as per Accounting Standard 7 relating to construction contracts and claimed deduction. Assessing Officer  held it to be a contingent liability and  disallowed claim. On appeal the Tribunal held that  deduction of expected loss is required to be provided for in books of account and is allowable as deduction.It was obligation of assessee to explain before Assessing Officer as to how cost had escalated by 300 per cent from original estimate and since there was no occasion for Assessing Officer to examine these factual aspects, matter was to be restored to file of Assessing Officer with direction to examine claim of assessee by calling for relevant details. (AY. 2010-11)