Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (10) TMI 1101 - AT - Income TaxDifference between the payment of net present value against the future liability of credited by the assessee under the capital reserve account in its books of account - capital receipt or revenue receipt - Payment of net present value of the future liability - Whether can be classified as remission or cessation of the liability so as to attract the provision of section 41(1)(a) of the Income Tax Act, 1961 or not ? - Held that:- No addition can be made. See Sulzer India Ltd case [2012 (9) TMI 1120 - ITAT MUMBAI] Whether provision of warranty claim without its quantification and its absence of statistical data related to actual warranty expense is an allowable expenditure u/s.37(1)? - Held that:- We find the finding given by the CIT(A) that assessee has sold the products manufactured by it with warranty has not been disputed by the revenue. The further finding of the learned CIT(A) that the assessee has in the past paid warranty claim to its customers and claimed the same as expenditure on actual basis also remains uncontroverted. The observation of the learned CIT(A) that because of the introduction of AS29 the assessee changed its method of recognising expenditure on warranty claim from actual basis to accrual basis and accordingly made provision of warranty claims on the basis of past experience/records also could not be controverted by the learned DR. Accordingly the order of the CIT(A) allowing the provision for warranty claim is upheld Interest on share application money disallowed by the AO u/s.37(1) - Held that:- Interest on share application money is allowable on the principles of commercial expediency.
|