New Delhi, Aug. 3 -- A redevelopment firm's provision of Rs.8 crore towards compensation payable to tenants cannot be disallowed merely because the amount had not been paid or finalised, the Income Tax Appellate Tribunal (ITAT), Mumbai, has ruled.

The tribunal held that the liability was an accrued business obligation arising from a redevelopment agreement and not a contingent liability, dismissing the Income Tax Department's appeal in the case relating to Assessment Year (AY) 2016-17, ET reported.

The dispute stemmed from a redevelopment project in Mumbai's Chunabhatti, where a partnership firm was engaged by a builder to get 56 occupants to vacate the property. The firm had already recognised liabilities of Rs.17 crore towards tenant ...