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2022 (11) TMI 79 - HC - Income TaxReopening of assessment us 147 - As argued reopening was on the basis of mere change of opinion - disallowance of liability on account of the warrantee - HELD THAT:- When we refer to Explanation (1) to Section 147 of the Act, as it existed at the relevant point of time as per which production before the Assessing Officer the account books or other evidence from which material evidence with due diligence could have been discovered by the Assessing Officer would not necessarily amount to disclosure within meaning of Section 147 of the Act. That being the position we answer the first question against the appellant and in favour of the revenue. Provision for warranty which incidentally was the reason for re-opening of assessment - As has been held by the Supreme Court in Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT] the law is settled that if a business liability has arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied, the liability is not a contingent one. The liability would be in-praesenti though it may have to be discharged at a future date. In the present case, no liability had arisen in the assessment year under consideration. All that the assessee had done was to make a provision for warranty that might accrue in future. There was no certainty of incurring the expenditure. No reason to answer the second question in favour of the appellant. Consequently this question is also answered against the appellant and in favour of the revenue.
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