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2015 (2) TMI 579 - AT - Income TaxDisallowance of 50% of the provisions out of the expenditure claimed under the head ‘post sales expenses’ for warranty expenses - CIT(A) deleted the addition - Held that:- We do not find any consistency in the provision for warranty. At the time of hearing before us, the learned counsel for the assessee was unable to state the method by which such provision for warranty was computed. Considering the totality of the facts, we deem it proper to set aside the orders of authorities below and restore the matter to the file of the Assessing Officer. We direct the assessee to submit before the Assessing Officer the basis by which the provision for the liability of warranty was computed. Thereafter, the Assessing Officer is directed to examine the reasonableness of the same in the light of the parameters laid down by Hon’ble Apex Court in the case of Rotork Controls India P.Ltd. (2009 (5) TMI 16 - SUPREME COURT OF INDIA). We direct the Assessing Officer to allow the liability which is found to be reasonable considering the facts and circumstances of the case. We further direct the Assessing Officer that if any part of the liability is disallowed, he will ensure that if the same is written back in the subsequent year, then, in the subsequent year, the tax may not be levied on the provision written back which is disallowed in this year, otherwise, it would amount to double taxation which is not permissible in law. Decided in favour of Revenue for statistical purposes.
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