Provision For Liquidated Damages is an Ascertained Liability and Allowable

SKF Engineering & Lubrication India Pvt. Ltd Vs JCIT (ITAT Bangalore) The assessee during the year under consideration has made a provision for liquidated damages for an amount of Rs. 49,20,000/-. The AO during the revision proceedings has disallowed the said amount on the basis that the calculation of liquidated damages is based on percentage agreed upon the time of purchase order and at the time of making the provision the assessee would not be aware of the date of delivery which a future date. Against the appeal filed by the assessee before the CIT(A) the disallowance was upheld on the ...