The assessee-firm, engaged in civil construction, had debited Rs. 4 crores as provision for construction expenses towards completion of remaining project work, which was disallowed by AO on the ground that under the mercantile system only crystallised liabilities were allowable, and this was upheld by CIT(A), though the deemed rent addition of Rs. 14,80,398 on unsold flats and shops was sustained. On appeal, the Tribunal held that since the flats sold during the year were not fully complete, the provision was made on a fair estimate following the matching concept, the amount was actually spent in the subsequent year through proper banking channels with no discrepancies noticed by the Revenue, and the assessee, following the project completion method, had already completed 90% of the project and recognised revenue on the entire sale proceeds, the provision for construction expenses was to be allowed and the addition of Rs. 4 crores was deleted; the addition on account of deemed rent was rightly sustained; and the disallowance of depreciation was restored to AO for fresh adjudication after affording the assessee an opportunity to substantiate its claim with relevant bills or vouchers. (AY. 2017-18)