Disallowance of ₹3.07 Crores for Contingent Liabilities: ITAT Quashes as Expenses Not Claimed in P&L

The ITAT quashed the disallowance of ₹3.07 crore for contingent liabilities, noting that these expenses were not claimed in the profit and loss (P&L) account. The tax authorities had initially disallowed the contingent liabilities, which were accounted for as provisions. However, the tribunal found that the disallowance was incorrect, as the liabilities were not part of the actual claim in the P&L. The ruling highlights the importance of proper accounting and disclosure of liabilities to avoid unnecessary disallowances in tax assessments.