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(3) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ignored the fact pointed out by the AO that assessee has not paid rent to MHADA till the assessment order passed u/s 144 r.w.s. 254 of the IT. Act, 1961 dated 24.03.2014."

(4) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in admitting additional evidence in contravention of Rule M/s. Sun Developers 46A and not giving specific opportunity to the Assessing Officer as required under Rule 46A of the Income tax Rules."

6. The A.O in the original assessment order passed u/s 143(3) dated 31/12/2009 had observed that various provisions were made towards cost of demolition, construction of compound wall, construction of uncompleted ground floor, rain water drainage and MHADA rent. The then A.O. observed that the provisions made were contingent in nature as real expenditure depends on some future clearance from the BMC as well as the provision of Rs.37,50,000/- towards rent payment to MHADA depends on settlement of dispute and the liability was not an ascertained liability as on 31/03/2007 although the provision was made 2 years back. Therefore, the then A.O. disallowed the expenditures as per the provision of section 40(a)(ia). Ld. CIT(A) deleted the additions on the ground that the expenses, if any, incurred in future would be taxable u/s 41(1) of the Act and as per the submission, it was evident that there was a claim of M/s. Sun Developers Rs.45,23,438/- from MHADA. Hence, the addition of Rs.37,50,000/- made by the then A.O. was deleted by Ld. CIT(A). However, amount of Rs.42,10,070/- being expenses claimed in the nature of contingent / unascertained liabilities not allowable u/s 37 of the IT. Act. The ITAT then set aside the matter back to the AO for fresh consideration resulting in the present assessment.

7. As the assessee did not respond to the set aside assessment proceedings despite being given number of opportunities by the A.O., the A.O. disallowed the expenses/liabilities to the tune of Rs.8,00,000 and MHADA rent of Rs.37,50,000 and the same was added back to the total income of the assessee.

8. By the impugned order, CIT(A) deleted the addition by observing as under:-

5.3 Ground 3: This is against the action of the AO in disallowing a claim of rent from I MHADA against the appellant. The MHADA vide its demand notice dated 18/09/2006 has raised a demand of Rs 45,23,438 including arrears of rent, penalty and interest. Out of this demand, the appellant has made a provision of Rs 37,50,000 in his books. I find that the / appellant paid a sum of Rs 18,00,000 as a regular payment to MHADA and the same has been allowed as a deduction by the AO. Over and above this amount, MHADA has demanded Rs 45,23,438 from the appellant during the PY relevant to the AY 2007-08. The appellant seems to have made a provision towards the arrear of rent alone and has appealed against the demand of MHADA. Once again, this provision is to be allowed as the same was existing during the PY relevant to the AY 2007-08, following the decisions of the Hon'ble Supreme Court cited supra. I also find that my predecessor in office has allowed this claim of the appellant on the same facts. I therefore direct the AO to allow the deduction of Rs.37,50,000/- as claimed by the appellant. Ground 3 is allowed.