Assessee was awarded a project for supply of super critical turbines for thermal power project. Contract value consisted of offshore supply and onshore supply.\u00a0 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\u00a0 held it to be a contingent liability and\u00a0 disallowed claim. On appeal the Tribunal held that\u00a0 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)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 37(1) : Business expenditure-Project for offshore and onshore supply of super critical turbines for thermal power project-Provision for foreseeable loss-Contingent liability-Accounting Standard 7-Matter is restored to file of Assessing Officer with direction to examine claim of assessee by calling for relevant details.[S. 145] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-43216","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-bf2","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/43216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=43216"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/43216\/revisions"}],"predecessor-version":[{"id":43217,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/43216\/revisions\/43217"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=43216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=43216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=43216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}