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2011 (7) TMI 573 - KARNATAKA HIGH COURTProvision for warranty - whether allowable as expenditure - Held that:- Warranty provision needs to be recognized because the appellant is an enterprise having a present obligation as a result of past events resulting in an outflow of resources - Lastly, a reliable estimate can be made of the amount of the obligation- In short, all three conditions for recognition of a provision are satisfied in this case - As decided in Rotork Controls' India (P.) Ltd. v. CIT [2009 (5) TMI 16 - SUPREME COURT OF INDIA] allowing the claim of provision for warranty stating that, "with making of provision on the basis of estimated present value of contingent liability holds good during the assessment years in question qua warranty claims". No substantial question of law arises for consideration in this appeal.
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