When assessee reverses a unilateral write back of dues payable to a vendor to its P & L account, the liability is to be treated as contingent liability

Echjay Forgings P. Ltd. Vs. ITO (ITAT Mumbai)- The assessee has merely reversed a unilateral write back of dues payable to vendor. As a matter of fact, as later developments showed, the very decision of writing off amount payable to Is pat Profiles Limited was premature and based on too optimistic an appraisal of vendor’s willingness of forego the claim. All that the assessee has done in the present year to reverse the action of write off. There is no dispute, as evident from the legal proceedings initiated by the vendor and as evident from the fact that ultimately assessee had to pay off t...