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2015 (7) TMI 1261 - AT - Income TaxProvision for warranty disallowed - there is no consistency in the formula on the basis of which provision is made and there is no reasonable basis behind making estimate for provision for warranty - Held that:- The provision of warranty expenses has been made by the assessee on the basis of past experience and on a scientific basis. Even the actual expenditure incurred on subsequent years is more than that for which the provision was made. We, therefore, do not find any justification on the part of the lower authorities in disallowing the claim of the assessee on this issue. The orders of the lower authorities are hereby set aside and the claim of the assessee on this issues is allowed. Claim for deduction of prior period expenses - CIT-A rejecting the claim for deduction on the ground that the relief can be claimed only by filing the revised return - Held that:- The taxing authorities should charge the legitimate taxes from the tax payers. They are not supposed to punish them for their bonafide mistakes of not claiming a deduction to which they are otherwise eligible under the provisions of relevant laws. The ld. CIT(A) in appeal was supposed to look into the claim of the assessee and if found genuine then to allow the same as while adjudicating the appeal, he also acts as a quasi-judicial authority . He therefore has also failed to exercise his jurisdiction in the right manner - the order of the Ld. CIT(A) on this issue is set aside and the matter is again restored to him with a direction to look into and consider the claim of the assessee and if the assessee is found eligible for the said claim, then to allow the same accordingly.
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