Encashment of bank guarantee due to inadequate performance is allowable expense

Green Delhi BQS Limited Vs ACIT (ITAT Delhi) The simple issue involved in this appeal is whether the bank guarantee encashed by the Delhi transport Corporation on the facts submitted above is an allowable expenditure or not or is allowable to the assessee under section 28 of the income tax act or not. The identical issue has been considered by the Hon’ble Gujarat High Court in case of neo Constructo construction Ltd 218 taxman 24/37 Taxmann.com 57 wherein the fact that the assessee company was engaged in the business of construction and development of plants. It entered into a contract...