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2021 (6) TMI 250 - ITAT PUNEAllowability of provision of warranty expenditure - AO had clearly disallowed the provision for warranty expenditure holding it to be contingent - HELD THAT:- CIT (A) had rightly taken note of the legal position governing the allowability of provision for warranty expenditure as laid down in the case of CIT Vs Rotork Controls India Ltd. [2009 (5) TMI 16 - SUPREME COURT]. CIT (A) while applying the parameters laid down by the Hon'ble Supreme Court in the said decision, had not considered the most relevant data and information i.e., terms and conditions laid down in the warranty policy for the company, what is the percentage of actual claims made for warranty claims in terms of the sales etc. We are of the considered opinion that the matter should be remitted back to the file of ld. CIT (A) for denovo consideration with a direction to decide the issue on hand keeping in view with the terms and conditions of the warranty policy as well as historical data as laid down by the Hon'ble Supreme Court's decision in the case of Rotork Controls India Ltd. (supra). Accordingly, the matter is remanded back to the file of ld. CIT (A). Appeal of the assessee is allowed for statistical purposes.
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