Disallowance of contingent liability unjustified if not claimed as expenditure

Knowledge Infrastructure Systems Pvt Ltd Vs DCIT (ITAT Delhi) ITAT Delhi held that the expenditure not claimed cannot be disallowed while determining the taxable income. Hence, disallowance of contingent liability as expenditure unjustified as the same was never claimed as expenditure for the purpose of determining total income. Facts- The assessee has challenged the adjustment of Rs.448,56,87,589/- on account of ‘contingent liabilities’ mainly in the nature of corporate guarantee (issued to the bank on behalf of the subsidiary), letter of credit and disputed indirect tax matter etc. resul...