Provision for outstanding expenses for ascertained liability allowable

Culver Max Entertainment Private Limited Vs ACIT (ITAT Mumbai) In the case of Culver Max, the dispute centered around the treatment of a provision for outstanding expenses amounting to Rs. 156.38 crores in its profit and loss account. The Assessing Officer (AO) had partially disallowed these provisions, arguing that they did not qualify as allowable deductions because they represented unascertained liabilities. Culver Max countered this argument by invoking the principles of the mercantile system of accounting, which mandates that expenses and losses be recognized as they accrue, irrespective ...