MAHINDRA WATER UTILITIES LTD, MUMBAI V. ASSTT CIT RG 6(3), MUMBAI

ITA 6429/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6597 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 20-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PRASAD BAPAT
• Section: 14A; 37

Judgement Text

B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI .. , , BEFORE SHRI P.M. JAGTAP, AM AND SHRI SANJAY GARG, J M ./ I.T.A. NO.1032 /MUM/2011 ( / ASSESSMENT YEAR : 2007-2008 ./ I.T.A. NO.6429 /MUM/2011 ( / ASSESSMENT YEAR : 2008-2009 M/S MAHINDRA WATER UTILITIES LIMITED, 5 TH FLOOR, MAHINDRA TOWERS, WORLI, MUMBAI 400 018. / VS. ASSTT. COMMISSIONER OF INCOME TAX RG.6(3), MUMBAI 20. ./ PAN :AACCM4471A ( / APPELLANT ) .. ( !' / RESPONDENT ) A SSESSEE BY SHRI PRASAD BAPAT DEPARTMENT BY : SHRI RAVI PRAKASH ' ( / DATE OF HEARING : 10-03-2014 ' ( / DATE OF PRONOUNCEMENT : 07-05-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THESE TWO APPEALS FILED BY THE ASSESSEE AGAINST TWO SEPARATE ORDERS PASSED BY THE LD. CIT(A)- 12, MUMBAI DTD. 26-11-201 0 AND 14-06-2011 FOR ASSESSMENT YEARS 2007-08 AND 2008-09 RESPECTIVELY I NVOLVE A COMMON ISSUE AND THE SAME THEREFORE HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS SINGLE CONSOLIDATED ORDER FOR THE SAKE OF CONV ENIENCE. 2. THE SOLITARY ISSUE INVOLVED IN THE APPEAL OF THE ASSESSEE FOR A.Y. 2007- 08 RELATES TO THE ADDITION OF RS. 25,27,070/- MADE BY THE A.O. AND CONFIRMED ITA 1032/M/11 & 6429/M/11 2 BY THE LD. CIT(A) ON ACCOUNT OF DISALLOWANCE OF PRO VISIONS MADE BY THE ASSESSEE TREATING THE SAME AS CONTINGENT LIABILITY. 3. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF OPERATING AND MANAGING WATER AND SEWERA GE SYSTEMS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION I.E. 200 7-08 WAS FILED BY IT ON 29-10-2007 DECLARING TOTAL INCOME OF RS. 8,66,97,18 0/-. DURING THE COURSE OF ASSESSMENT PROCEEDING, IT WAS NOTICED BY THE A.O. T HAT OUT OF THE PROVISIONS DEBITED BY THE ASSESSEE TO THE P&L ACCOUNT, THE PRO VISIONS TO THE EXTENT OF RS. 5,34,000/- WERE REVERSED SUBSEQUENTLY IN THE BOOKS OF ACCOUNT WHILE THE PROVISIONS TO THE EXTENT OF RS. 19,93,070/- HAD NOT BEEN PAID EVEN UPTO THE DATE OF ASSESSMENT I.E. FOR MORE THAN TWO YEARS. HE , THEREFORE, REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY THE PROVISIONS MADE B Y IT TO THE EXTENT OF RS. 25,27,070/- SHOULD NOT BE DISALLOWED TREATING THE S AME AS UN-ASCERTAINED AND CONTINGENT LIABILITY. AS NOTED BY THE A.O. IN T HE ASSESSMENT ORDER, NO EXPLANATION IN THIS REGARD WAS OFFERED BY THE ASSES SEE EXCEPT STATING THAT THE RELEVANT PROVISIONS WERE MADE AS PER THE AGREEMENT. THE ASSESSEE ALSO DID NOT OFFER ANY EXPLANATION FOR THE INORDINATE DELAY IN SETTLING THESE PROVISIONS. THE A.O. THEREFORE DISALLOWED THE PROVISIONS MADE B Y THE ASSESSEE TO THE EXTENT OF RS. 25,27,070/-. 4. THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF PROVISIONS OF RS. 25,27,070/- WAS DISPUTED BY THE ASSESSEE IN AN APPE AL FILED BEFORE THE LD. CIT(A) AND AFTER CONSIDERING THE SUBMISSIONS MADE O N BEHALF OF THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD . CIT(A) DECIDED THIS ISSUE FOR THE FOLLOWING REASONS GIVEN IN PARA 3.2 OF HIS IMPUGNED ORDER:- 1 HAVE CAREFULLY CONSIDERED THE ABOVE ISSUE AND I FIND THAT I AM IN AGREEMENT WITH THE ACTION OF THE ASSESSING OFFICER WHEREIN IT HAS BEEN OBSERVED THAT THE APPELLANT HAS NOT BEEN ABLE TO GI VE A PLAUSIBLE EXPLANATION TO PROVE THAT THE PROVISIONS MADE ARE N OT TOTALLY CONTINGENT IN NATURE UNCERTAIN, UNDETERMINED OR DISPUTED. THE APPELLANTS STATEMENT THAT THESE AMOUNTS ARE PAYABLE AS PER AGR EEMENT WILL NOT ITA 1032/M/11 & 6429/M/11 3 HOLD UNLESS IT CAN BE PROVED BY THE APPELLANT BY WA Y OF PRIMARY DOCUMENTS. I FIND NEITHER AT THE ASSESSMENT STAGE N OR AT THE APPEAL STAGE THE APPELLANT HAS FILED ANY DOCUMENTS TO JUST IFY ITS CLAIM. THE REASON FOR THESE LIABILITIES TO STILL EXIST HAS NOT BEEN EXPLAINED. IT IS SEEN THAT REGARDING A CERTAIN PORTION OF THE LIABILITY C LAIMED THAT IS RS. 5,34,00O/- THE SAME STAND REVERSED BACK BY THE APPE LLANT ITSELF. THE REASON FOR THIS HAS BEEN THAT THESE LIABILITIES ARE ESTIMATED LIABILITIES AND NOT QUANTIFIED LIABILITIES. WHEN QUESTIONED IT WAS FOUND THAT THE ABOVE MENTIONED AMOUNT TREATED AS LIABILITY WAS IN EXCESS OF THE EXPENSE INCURRED AND THEREFORE REVERSED. ON THE BAS IS OF THIS EXPLANATION THE APPELLANT WAS ASKED TO PROVE THAT T HE LIABILITIES NOW REMAINING AND CLAIMED AS A DEDUCTION WHERE QUANTIFI ED LIABILITIES, THIS HAS NOT BEEN DONE. IN MAKING THE ASSESSMENT OF A PA RTICULAR YEAR DEDUCTIONS CAN BE PERMITTED ONLY IN RESPECT OF EXPE NSES WHICH ARE FOUND TO HAVE BEEN INCURRED IN THE RELEVANT ACCOUNT ING PERIOD. IN ORDER TO BE ENTITLED TO DEDUCTION THE EXPENSE MUST BE INC URRED OR THE LIABILITY FOR THE EXPENSE MUST HAVE OCCURRED IN THE YEAR IN Q UESTION DEPENDING UPON THE SYSTEM OF ACCOUNTING FOLLOWED BY THE APPEL LANT. THUS IN ORDER THAT AN ITEM OF EXPENDITURE SHOULD BE ENTITLED TO D EDUCTION U/S 37 OF THE I.T. ACT, IT SHOULD HAVE BEEN AN INCURRED EXPEN SE FOR DISCHARGING A LIABILITY THAT ACTUALLY EXISTED DURING THE ACCOUNTI NG PERIOD. THE MERE SETTING APART OF AN AMOUNT TO MEET A LIABILITY NOT ACTUALLY PRESENT OR QUANTIFIED BUT ONLY CONTINGENT CANNOT BEAR THE CHAR ACTER OF EXPENDITURE TILL THE LIABILITY BECOMES REAL. IF THE ACCOUNTS AR E MAINTAINED ON MERCANTILE BASIS THEN THE DEDUCTION HAS TO BE MADE IN THE YEAR IN WHICH THE LIABILITY ACCRUES. ON THE OTHER HAND IF T HE ACCOUNTS ARE MAINTAINED ON CASH BASIS THEN THE DEDUCTION HAS TO BE MADE IN THE YEAR IN WHICH THE LIABILITY IS DISCHARGED AND PAID. PUTTING ASIDE MONEY ON A LIABILITY THAT MAY BECOME EXPENDITURE ON THE H APPENING OF AN EVENT IS NOT AN EXPENDITURE ALLOWABLE UNDER SECTION 37 OF THE INCOME TAX ACT. IN THIS CASE IT IS SEEN THAT THE APPELLANT HAS CREATED A PROVISION/LIABILITY FOR AN EXPENDITURE WHICH HAS BE EN CLAIMED AS A DEDUCTION WHICH WAS NOT PROVED TO BE QUANTIFIED AT ALL. IN FACT REGARDING CERTAIN ISSUES THERE HAS BEEN A REVERSAL OF LIABILITIES MADE SINCE IN THE INITIAL STAGE THE LIABILITY WAS ESTIMA TED AND CONTINGENT. IN VIEW OF THIS I FIND THAT THE CONTENTION OF THE APPE LLANT CANNOT BE UPHELD. THE OBSERVATION OF THE ASSESSING OFFICER ALONG WITH THE ACTION IN MAKING AN ADDITION REGARDING THE SAID LIABILITY IS UPHELD AND CONFIRMED. THE APPELLANT HAS STATED THAT IT HAS DISALLOWED THE SAI D AMOUNT UNDER SECTION 40 (A) (IA) OF THE INCOME TAX ACT WHILE COM PUTING ITS INCOME. THEREFORE ADDITION MADE BY THE ASSESSING OFFICER NO W IS AKIN TO A DOUBLE ADDITION. FROM THE DETAILS SUBMITTED IT IS S EEN THAT EXPENSES THAT HAVE BEEN DISALLOWED UNDER THE ABOVE MENTIONED SECTION I.E. 40(A)(IA) OF THE LT. ACT BY THE APPELLANT IN HIS CO MPUTATION OF INCOME ALSO INCLUDE THE SAID EXPENSES CLAIMED AS LIABILITY . UNDER THIS SECTION WHICH THE APPELLANT HAS USED TO MAKE THE SAID DISAL LOWANCE, IT STANDS THAT ON CERTAIN FUTURE DATE WHEN THE TDS IS EFFECTE D THE DEDUCTION CLAIM CAN BE MADE BY THE APPELLANT IN ITS COMPUTATI ON OF INCOME. THE QUESTION HERE IS THAT WHETHER THE APPELLANT IS ENTI TLED TO CLAIM THESE ITA 1032/M/11 & 6429/M/11 4 LIABILITIES AT ANY OF TIME OR NOT. AS PER THE FINDI NGS OF THE ASSESSING OFFICER THE APPELLANT IS NOT ALLOWED OR ENTITLED TO THIS CLAIM AT ALL AS THESE CLAIMS ARE NEITHER PROVED NOR QUANTIFIED. IT IS TRUE THAT A DOUBLE ADDITION OF THE SAME AMOUNT CANNOT BE MADE IN THE C OMPUTATION OF INCOME AND TO THIS EXTENT THE CONTENTION OF THE APP ELLANT IS TO BE ACCEPTED. AS THE APPELLANT HAS ITSELF INCLUDED THE SAID AMOUNT AS INCOME IN ITS COMPUTATION OF INCOME, A SEPARATE ADD ITION IS NOT WARRANTED. HOWEVER IT IS CLARIFIED THAT THE ABOVE A DDITION WOULD MAINLY STAND IN ACCORDANCE TO THE OBSERVATION OF THE ASSES SING OFFICER. THE ADDITION MADE BY THE APPELLANT ITSELF FOR THE REASO NS MENTIONED WOULD ONLY FOLLOW. THE AQ IS THEREFORE DIRECTED TO VERIFY HE COMPUTATION MADE BY THE APPELLANT AND TO ENSURE THAT WHILE MAKING TH E SAID ADDITION THE SAME IS NOT EFFECTED TWICE. THE GROUND OF APPEAL RA ISED BY THE APPELLANT IS PARTLY ALLOWED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSES SEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE DISALLOWANCE ON ACCOUNT OF PROVI SIONS TO THE TUNE OF RS. 62,45,270/- WAS OFFERED BY THE ASSESSEE U/S 40(A)(I A) OF THE INCOME TAX ACT, 1961 INCLUDING THE PROVISIONS OF RS. 25,27,070/- DI SALLOWED BY THE A.O. HE HAS SUBMITTED THAT WHEN THIS MATTER OF DOUBLE DISAL LOWANCE WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A), HE DIRECTED THE A.O. NOT TO MAKE A SEPARATE ADDITION OF RS. 25,27,070/-. HE HAS CONTENDED THAT THE DISALLOWANCE ON ACCOUNT OF PROVISIONS THUS STANDS FINALLY CONFIRMED BY THE LD. CIT(A) U/S 40(A)(IA) OF THE ACT AND THE ASSESSEE WILL GET DEDU CTION ON ACCOUNT OF THE SAID PROVISIONS IN THE YEAR WHEN THE TAX IS DEDUCTED FRO M THE CORRESPONDING PAYMENTS MADE AND PAID TO GOVERNMENT TREASURY. WE A RE UNABLE TO AGREE WITH THIS CONTENTION OF THE LD. COUNSEL FOR THE ASS ESSEE. NO DOUBT, IT WAS NOTED BY THE LD. CIT(A) IN HIS IMPUGNED ORDER THAT THE ASSESSEE HAVING ALREADY INCLUDED THE AMOUNT OF PROVISION TO THE EXT ENT OF RS. 25,27,070/- IN ITS INCOME BY DISALLOWING THE SAID PROVISIONS U/S 4 0(A)(IA) OF THE ACT, NO SEPARATE ADDITION OF THE SAME AMOUNT WAS WARRANTED. HE, HOWEVER, CLARIFIED THAT THE ADDITION OF RS. 25,27,070/- WOULD MAINLY S TAND IN ACCORDANCE WITH ITA 1032/M/11 & 6429/M/11 5 THE OBSERVATIONS OF THE A.O. AND THE ADDITION MADE BY THE ASSESSEE COMPANY ITSELF WOULD ONLY FOLLOW. IT IS THUS CLEAR THAT TH E ADDITION OF RS. 25,27,070/- ON ACCOUNT OF PROVISIONS IS CONFIRMED BY THE LD. CV IT(A) VIDE HIS IMPUGNED ORDER ON THE BASIS OF OBSERVATIONS MADE BY THE A.O. AND IT IS NOT A CASE THAT THE SAID ADDITION IS CONFIRMED BY THE LD. CIT(A) U/ S 40(A)(IA) OF THE ACT AS SOUGHT TO BE MADE OUT BY THE LD. COUNSEL FOR THE AS SESSEE. 6. AS REGARDS THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF PROVISIONS OF RS. 25,27,070/- ON MERIT, IT IS OBSERVED THAT TH E LD. COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO OFFER ANY SATISFACTOR Y EXPLANATION AS TO WHY THERE WAS INORDINATE DELAY IN MAKING THE PAYMENT OF PROVISIONS TO THE EXTENT OF RS.19,93,070/- OR REVERSING THE PROVISIONS SUBSE QUENTLY TO THE EXTENT OF RS. 5,34,000/-. HE HAS ALSO NOT BROUGHT ON RECORD ANY EVIDENCE TO SHOW THAT ANY PAYMENT HAS BEEN MADE TILL DATE AGAINST THESE P ROVISIONS MADE IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2007-08. MOREOVER, T HE MERE FACT THAT THE SAID PROVISIONS WERE MADE AS PER THE AGREEMENT WITHOUT O FFERING ANY FURTHER EXPLANATION IN RESPECT OF DELAY IN MAKING THE PAYME NT THEREOF OR REVERSING SUCH PROVISIONS SUBSEQUENTLY TO SOME EXTENT, IN OUR OPINION, IS NOT SUFFICIENT TO ALLOW THE CLAIM OF THE ASSESSEE FOR THE DEDUCTIO N ON ACCOUNT OF THE SAID PROVISION. WE, THEREFORE, UPHOLD THE IMPUGNED ORDE R OF THE LD. CIT(A) CONFIRMING THE DISALLOWANCE OF RS. 25,27,070/- MADE BY THE A.O. ON ACCOUNT OF PROVISIONS MADE BY THE ASSESSEE TREATING THE SAM E AS CONTINGENT LIABILITY AND DISMISS THE APPEAL FILED BY THE ASSESSEE FOR A. Y. 2007-08. 7. IN GROUND NO. 1 OF ASSESSEES APPEAL FOR A.Y. 20 08-09, THE ASSESSEE COMPANY HAS DISPUTED THE ADDITION OF RS. 88,48,081/ - MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF DISALLOWA NCE OF PROVISIONS MADE BY THE ASSESSEE TREATING THE SAME AS CONTINGENT LIABIL ITY. ITA 1032/M/11 & 6429/M/11 6 8. IN ITS P&L ACCOUNT FILED ALONG WITH THE RETURN O F INCOME FOR A.Y. 2008- 09, A SUM OF RS. 88,48,081/- WAS DEBITED BY THE ASS ESSEE ON ACCOUNT OF PROVISIONS MADE FOR PROFESSIONAL FEES PAYABLE TO PE OPLE PLUS HR CONSULTANTS P. LTD. ACCORDING TO THE A.O., THIS PROVISION MADE BY THE ASSESSEE WAS NOT FOR THE LIABILITY TOWARDS EXPENSES ACTUALLY INCURRED DU RING THE YEAR UNDER CONSIDERATION. KEEPING IN VIEW THE SAME AND ALSO HA VING REGARD TO THE FACT THAT CERTAIN PROVISIONS HAD BEEN SUBSEQUENTLY REVER SED BY THE ASSESSEE, HE TREATED THE PROVISION OF RS. 88,48,041/- MADE BY TH E ASSESSEE AS UN- ASCERTAINED CONTINGENT LIABILITY AND THE SAME WAS D ISALLOWED BY HIM. THE DISALLOWANCE OF RS. 88,48,041/- MADE BY THE A.O. ON ACCOUNT OF PROVISIONS MADE WAS DISPUTED BY THE ASSESSEE IN AN APPEAL FILE D BEFORE THE LD. CIT(A) AND AFTER CONSIDERING THE SUBMISSIONS MADE ON BEHAL F OF THE ASSESSEE AND THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) UPHELD THE ORDER OF THE A.O. TREATING THE PROVISIONS MADE BY THE ASSESSEE AS UNA SCERTAINED/CONTINGENT LIABILITY FOR THE FOLLOWING REASONS GIVEN IN PARA 6 OF HIS IMPUGNED ORDER:- 6. I HAVE CAREFULLY CONSIDERED THE ORDER OF THE AS SESSING OFFICER AND THE SUBMISSION OF THE APPELLANT. I FIND THAT AS FAR AS RS. 4,48,041/- IS CONCERNED, THERE SEEMS TO BE NO DOUBT THAT THE AMOU NT STANDS REVERSED AND IS TO BE CONSIDERED AS THE INCOME OF T HE APPELLANT IN THE CONCERNED YEAR. REGARDING THE BALANCE I.E. SAID TO BE DUE TO UNITED UTILITIES, IT IS SEEN THAT THE APPELLANT DOES HAVE AN AGREEMENT DATED 17/10/2002 WITH THE SAID PARTY FOR GETTING/OBTAININ G TECHNICAL SUPPORT AND TECHNOLOGY TRANSFER. THE AGREEMENT IT IS SEEN I S A DETAILED AGREEMENT WHICH TALKS ABOUT THE SERVICES THAT HAVE TO BE PROVIDED BY UNITED UTILITIES TO THE APPELLANT. HOWEVER, REGARDI NG THE COMPENSATION AND THE PAYMENT1 IT IS SEEN THAT THE APPELLANT IS S UPPOSED TO BE PAYING THE AMOUNT TO UNITED UTILITIES ON THE COMPLETION OF VARIOUS MILESTONES. FOR THIS, THE SAID CONCERN WILL RAISE INVOICES AND SUBMIT THE SAME TO THE APPELLANT. AS PER THE AGREEMENT, THE PAYMENT HA S TO BE MADE WITHIN SEVEN WORKING DAYS OF THE RECEIPT OF THE INV OICE BY THE APPELLANT. IT HAS BEEN STATED IN THE AGREEMENT THAT TOTAL COMP ENSATION THAT SHALL BE PAID BY THE APPELLANT TO THE SAID CONCERN SHALL IN NO EVENT EXCEED RS. 42 MILLION AND IS INCLUSIVE OF SERVICE-TAX ETC. , IF APPLICABLE. REGARDING THE FEE FOR SECONDMENT OF PERSONALS, IT H AS BEEN STATED IN THE AGREEMENT THAT THE UNITED UTILITIES SHAH RAISE INVO ICES FOR EACH MONTH TO THE APPELLANT WHICH THE APPELLANT SHALL PAY. THE AMOUNT THAT IS TO BE PAID TO THE OPERATION DIRECTOR, TECHNICAL PERSON ON E AND TECHNICAL PERSON TWO HAS ALSO BEEN PROVIDED AS HAS BEEN THE R ATES FOR PART-TIME ITA 1032/M/11 & 6429/M/11 7 ASSIGNED STAFF. HOWEVER, IT IS VERY CLEAR FROM THE AGREEMENT THAT THE PAYMENTS HAVE TO BE DONE ONLY AFTER THE RAISING OF INVOICES WHICH INDICATES THAT THE LIABILITY BECOMES ASCERTAINED ON LY WHEN INVOICES ARE RAISED BY THE SAID CONCERN. I FIND THAT REGARDING R S. 84 LACS TREATED AS PROVISION TO BE PAID TO UNITED UTILITIES, THE APPEL LANT HAS NOT BEEN ABLE TO PRODUCE ANY INVOICE THAT HAS BEEN RAISED BY THE SAID CONCERN FOR THE SERVICES RENDERED. THE FULL VOLUME OF SERVICES REND ERED ALONG WITH THE HOURS OF MANPOWER USED IS THE VERY BASIS OF RAISING THE INVOICE ON WHICH THE QUANTIFIED PAYMENT HAS TO BE MADE AS STAT ED IN THE AGREEMENT. THEREFORE, ANY AMOUNT SET ASIDE TO PAYME NT WITHOUT THE SUPPORT OF THE INVOICE CAN ONLY BE TERMED AS A CONT INGENT LIABILITY AND NOT AS A ASCERTAINED LIABILITY EVEN THOUGH THERE IS AN AGREEMENT, WHICH INDICATES THAT CERTAIN PAYMENTS HAVE TO BE MADE. IN THE CASE OF THE APPELLANT, I FIND THAT THE APPELLANT HAS MADE A PRO VISION BASING IT ON AN AGREEMENT THAT HAS BEEN SIGNED WITH UNITED UTILITIE S IN SPITE OF THE FACT THAT AT THE POINT OF TIME OF MAKING OF THE PROVISIO N THE APPELLANT DID NOT HAVE ANY PRIMARY DOCUMENTS LIKE INVOICES TO INDICAT E THE ACTUAL AMOUNT OF PAYMENT THAT HAD TO BE MADE. AT BEST, THI S PROVISION MADE BY THE APPELLANT WAS ESTIMATED ONE AND CAN ONLY BE CALLED CONTINGENT IN NATURE. 9. FOR THE REASONS GIVEN ABOVE AND RELYING ON THE O RDER OF HIS PREDECESSOR IN ASSESSEES OWN CASE FOR A.Y. 2007-08 ON A SIMILA R ISSUE, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF RS. 88,48,041/- MADE BY THE A.O. ON ACCOUNT OF PROVISIONS MADE BY THE ASSESSEE TREATING THE SAM E AS UNASCERTAINED OR CONTINGENT LIABILITY. 10. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSER VED THAT WHILE CONFIRMING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF PROVISI ONS MADE BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION I.E A.Y. 2008-09 VI DE HIS IMPUGNED ORDER, THE LD. CIT(A) HAS RELIED ON THE DECISION OF HIS PREDEC ESSOR PASSED IN ASSESSEES OWN CASE ON THE SIMILAR ISSUE FOR A.Y. 2007-08. THE SAID APPELLATE ORDER OF THE LD. CIT(A) PASSED FOR A.Y. 2007-08 HAS ALREADY BEEN UPHELD BY US WHILE DISPOSING OF THE APPEAL OF THE ASSESSEE FOR A.Y. 20 07-08. MOREOVER, AS HELD BY THE LD. CIT(A) IN HIS IMPUGNED ORDER, THE AMOUNT FO R THE SERVICES RENDERED WAS PAYABLE BY THE ASSESSEE AS PER THE RELEVANT AG REEMENT ONLY AFTER RAISING THE INVOICES BY THE OTHER PARTY. ACCORDING TO THE L D. CIT(A), THE LIABILITY FOR THE ITA 1032/M/11 & 6429/M/11 8 SAID AMOUNT THUS COULD BE SAID TO BE ASCERTAINED ON LY WHEN THE INVOICES WERE RAISED BY THE SAID PARTY AND SINCE THE ASSESSEE WAS NOT ABLE TO PRODUCE ANY SUCH INVOICES RAISED BY THE SAID PARTY DURING THE Y EAR UNDER CONSIDERATION FOR THE SERVICES RENDERED, THE LD. CIT(A) HELD THAT THE LIABILITY WAS UNASCERTAINED OR CONTINGENT. KEEPING IN VIEW THESE REASONS GIVEN BY THE LD. CIT(A) AS WELL AS THE CONCLUSION DRAWN BY US ON THE SIMILAR ISSUE WHI LE DISPOSING OF THE APPEAL OF THE ASSESSEE FOR A.Y. 2007-08, WE UPHOLD THE IMP UGNED ORDER OF THE LD. CIT(A) CONFIRMING THE DISALLOWANCE OF RS. 88,48,08 1/- MADE BY THE A.O. ON ACCOUNT OF PROVISIONS MADE BY THE ASSESSEE TREATING THE SAME AS UNASCERTAINED OR CONTINGENT LIABILITY. GROUND NO. 1 OF ASSESSEES APPEAL FOR A.Y. 2008-09 IS ACCORDINGLY DISMISSED. 11. GROUND NO. 2 OF ASSESSEES APPEAL FOR A.Y. 2008 -09 RELATING TO THE DISALLOWANCE OF RS. 44,109/- MADE BY THE A.O. AND C ONFIRMED BY THE LD. CIT(A) U/S 14A OF THE ACT HAS NOT PRESSED BY THE LD . COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US. THE SAME IS ACCO RDINGLY DISMISSED AS NOT PRESSED. 12. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07-05-2014 . ' . / 07-05-2014 ' SD/- SD/- (SANJAY GARG) (P.M. JAGTAP ) JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; / DATED 07-05-2014 [ .../ RK , SR. PS ITA 1032/M/11 & 6429/M/11 9 ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. 2 () / THE CIT(A)12 MUMBAI. 4. 2 / CIT -6, MUMBAI 5. 5 !7 , ( 7 , / DR, ITAT, MUMBAI B BENCH 6. / GUARD FILE. / BY ORDER, '5 ! //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI