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2018 (10) TMI 1817 - GUJARAT HIGH COURTDisallowance of expenses for provision of five year warranty - estimate was based on number of compressors on such machines which failed every year in last five years - Tribunal deleted the addition on the short ground of consistency - HELD THAT:- No where in the past the Revenue had objected to such claim. Quite apart from the Tribunal's observations on the issue of consistency which seem to be commencing, independently also we do not think that the disallowance was justified on merits. The assessee who was engaged in the business of manufacturing and selling air conditioned units would provide five year warranty to the customer. The expenditure was estimated on the basis of data of past five years of failure of the compressors which obviously in all air conditioned units would be the main concern. The principle of allowing expenditure on the basis of estimation which is derived through some scientific exercise, which in statistical terms used as actuary is well established. - Decided against revenue.
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