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Thus it is clear that the claim of the assessee with regards payment to NDMC is in the nature of contingent liability and hence not allowable under the act and is added back to the income of the assessee."

12. Being aggrieved the assesse preferred an appeal to Ld CIT(A). Ld CIT(A) was of the view that License Deed dated 14th July 1982 was not in force during the course of year under consideration and hence he upheld the disallowance made by the Ld AO. In support of his conclusions Ld CIT(A) has extracted and forcefully relied upon show cause notice dated 12th November 1999 issued by NDMC to the assessee. Conclusions recorded by Ld CIT(A) are as under:

"On 25th September, 1998, however, the NDMC gave another notice to the plaintiffs upon them to pay the arrears of licence fee. It was stated that in case the entire outstanding dues were not deposited, action would be taken under the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act against the plaintiffs. On 28th June, 1999 the NDMC sent a show cause notice to the plaintiffs calling upon them to deposit Rs.109,82,16,368/- allegedly due to the NDMC upto 30th June, 1999. This was naturally disputed by the plaintiffs and it was asserted that licence fee upto the year 2003 stood paid and no amount was payable by them to the NDMC. Thereafter certain meetings took place between the parties, however, no amicable solution was arrived at between them. A notice dated 12th November, 1999 was then issued by the NDMC to the plaintiffs informing the plaintiffs that the re-valuation of the licence fee was neither possible nor warranted. A meeting of the plaintiffs representative also took place with the Chairman of the NDMC on 22nd November, 1999. Plaintiffs allege that in that meeting the Chairperson of the plaintiffs hotel agreed to pay a sum of Rs.3 crores on the clear understanding that an Independent agency / committee would be constituted by the NDMC to determine the fair and equitable quantum/rate of licence fee. However, the chairperson refused to have agreed to the appointment of any such committee and gave one week's time to the plaintiffs to make payment failing which it was threatened that the licence would be cancelled and possession of the hotel would be taken. On this threat being given, the Plaintiffs filed a petition being Civil Writ Petition No.7163/99 in this Court.