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| The Tax Publishers2019 TaxPub(DT) 0436 (Del-Trib) INCOME TAX ACT, 1961
Section 145(1)
Amount towards provision for LTA expenses in the profit & loss account could not be disallowed on the ground of not incurring actual expenses as principle of consistency demanded that the claim of assessee should be accepted in this year also.
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Accounting method - Mercantile system of accounting - Provision for LTA expenses -
Assessee had debited an amount towards provision for LTA expenses in the profit & loss account. AO observed assessee-company was claiming these expenses as provisions and actual expenses in this regard had not been incurred. He observed that as hypothetic expenses were not allowable as per section 37(1) therefore, an amount was added back to the income of assessee-company. Held: In the preceding year as well as in the succeeding year the claim of assessee had been accepted. The principle of consistency demanded that the claim of assessee should be accepted in this year also. Thus, the addition on account of LTA was deleted.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 195
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